How fossil-fuel free is Pension-Bee’s Fossil-Fuel Free Plan?

In December 2020, PensionBee, an online pension platform, launched its ‘Fossil Fuel Free Plan.’ However, our initial examination of the plan’s holdings found a number of investments in companies that are directly linked to the fossil fuel sector, through distribution or the provision of infrastructure.

Although such holdings did not explicitly contradict the plan’s exclusion criteria, we believed that such holdings were likely to alarm some customers that want to keep their ethical pensions well away from the fossil fuel sector.

We published a critical piece about these findings on our website, following which PensionBee surveyed its customers to find out whether they wanted the plan to have stricter exclusions criteria. You can find the results of their survey here.

Service providers now excluded

The survey, which comprised 773 customers, found that 83% of respondents “would like to see the plan exclude companies that provide services to the fossil fuel industry, such as pipeline manufacturers.” As a result, PensionBee has now excluded such companies from the plan.

One of our primary aims at Ethical Consumer is to improve corporate practice, so it is fantastic to see a company altering its practices following feedback and consultation with its customers.

Banks funding fossil fuel exploration remain in

The survey also found that “69% of respondents would also wish to exclude banks that finance fossil fuel exploration.” However, PensionBee has not excluded banks that finance fuel exploration, and banks such as Barclays and Citigroup, leading financiers of fossil fuel expansion, were still found in the plan’s holdings.

Another interesting response from the survey was that 20% of people said that they were happy to accept increased cost, higher risk and possibility of lower returns to have a more specialist plan with even further exclusions. PensionBee hasn’t yet created such a plan, but stated, “we look forward to providing these customers with a new plan in due course.”

Transparency

At Ethical Consumer we believe consumers have a right to know where their money is invested, so investment and pension funds should disclose their holdings, at least on an annual basis.

When we first examined PensionBee’s Fossil Fuel Free Plan, only the top-ten largest holdings were publicly disclosed.

However, PensionBee now discloses the entire plan’s holdings (927 companies at the time of writing) on its website.

As with the plan’s new exclusions, the improvement in transparency is something to be applauded. However, PensionBee still does not publicly disclose the holdings of its other funds.