7 ways to wield your mighty pension-saver powers 

It's still a surprise for some people to learn that, until we retire, pension providers invest all your pension savings into companies on the stock market. 

They do this to (hopefully!) earn a share of company profits to pass on to you for your retirement. This is how you might receive a little more at retirement than you put away. 

This is a good thing - until you look at which companies your pension is profiting from. Fossil fuels, tobacco, factory farming, payday lenders and other types of companies doing more harm than good to people and the planet. 

But it doesn’t have to be that way. It's your money and you have a say where it goes. 

What can you do to have a more ethical pension?

Taking action with your pension is probably the single most effective thing you can do to make the world greener, cleaner and kinder, because pension funds invest trillions of pounds into the economy. This makes them enormously powerful. Powerful enough to shift HUGE chunks of money towards more sustainable companies and force the bad companies they own to change. But guess what, that money is all ours and so is the power.

Make My Money Matter is doing brilliant work to encourage pension funds to think about their environmental impact when they invest in companies. To reduce global emissions Make My Money Matter found that a ‘green’ pension is 21x more powerful than switching to renewable electricity, giving up meat and quitting flights COMBINED.

So how do we make pensions greener, cleaner and kinder?

While the pensions industry is starting to pay more attention to these issues and change how they invest, many are not. So we have to step up and take back control of what happens to our pension savings. 

7 ways to take action for a more ethical pension

Three great ways to start wielding your pension-saver powers are: 

1. Demand your pension/s follow a sustainable, harm-free investment policy that includes committing to net zero*. Tailor these email templates if you need to.
2. If you have a workplace pension, round up colleagues to request that your employer sign Make My Money Matter’s Green Pensions Charter; they can also use their Green Pensions factsheet guide for employers to find out more. 
3. Request that your pension provider integrate Tumelo into their service so that if you are invested in harmful companies, you have the power to vote at the company shareholder meetings and force them to change.

Then superpower your impact in these four ways:

1. Ask your pension provider for a report on how they (or their fund manager) vote at investee company shareholder meetings. They should be voting against harmful companies at least 60% of the time to show they want change. 
2. Tell your pension fund to join Climate Action 100+ to collaborate with other big investors to eliminate global carbon emissions. 
3. Tell your pension provider to invest using the EU Climate Transition Benchmarks and green taxonomy. They help investors to easily find companies that are green or genuinely turning green.
4. Tell your pension provider to join the UN-convened Net-Zero Asset Owner Alliance. That's where pension funds go to show their commitment to a net zero world and access support. 

If your pension provider fails to take action it might be time to consider another provider. But do your research and consider getting advice before switching to ensure you don’t lose out financially. We need you well resourced to help create and enjoy a greener, cleaner, kinder world. For you and our children.

You can find a number of ethical providers in our guide to ethical pensions.

Pension Power to you! 

*Net Zero is when carbon emissions have been reduced or eliminated, including from investments and supply chains, to the point where whatever remains is easily removed from the atmosphere by trees and other methods.

About the author

Charlene Cranny is a Chartered Sustainable Investment and Finance professional and founder of Economy of Good to help people make 'good money' a non-negotiable feature of their clean, green and kind lifestyle. 

Charlene has worked across the finance industry and featured in media such as Sky, BBC, The Times, Metro and Evening Standard to advocate for climate finance, women’s wealth, pension power and seeing more sustainable options for our finances.