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

Our research found that a new green pension fund from PensionBee was investing in companies providing essential services to the oil, gas and coal industry. However, since then there have been a number of changes. Read on for the updated position.

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.

image: pink hands holding black coal
Image credit: Greenpeace

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.”


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.

bullets lined up in V shape

Investing in arms and other questionable sectors

The fund states that it prohibits investment in manufacturers of controversial weapons, but it had several holdings in 'defence' companies, including a stake in BAE systems. Although these companies may not produce weapons that are technically classified as ‘controversial’, most people would probably agree that investing in any defence company is, at the very least, controversial.

BAE Systems, for example, is the fourth largest arms producer in the world and sells its products to authoritarian regimes such as Saudi-Arabia. It is also involved in the research, development, and managing nuclear- and autonomous weapons.

There were also holdings across other ethically questionable sectors, such as banking and gambling.

Other baseline screens

It is common practice for pension providers to offer a wide range of funds, ethical and non-ethical. Ethical Consumer expects a pension provider to have ethical policies that apply to all its funds, which set out baseline requirements, such as excluding investments in the manufacture of cluster munitions and other ‘controversial’ weapons.

PensionBee told Ethical Consumer that it applied “baseline screens to all plans, unless there is reason why that would not be possible, such as investing in cash or in line with Shariah principles.” While PensionBee disclosed some of its baseline screens in relation to its Fossil Fuel Free Plan, it doesn’t publicly disclose the baseline screens that apply to its other plans.

So, how ‘fossil-fuel free’ is Pension-Bee’s ‘Fossil-Fuel Free’ Plan?

When it was first launched, the plan only excluded companies “with proven or probable reserves in oil, gas or coal, tobacco companies, manufacturers of controversial weapons and persistent violators of the UN Global Compact.”

This meant that the plan still invested in major service providers to the fossil fuel sector, such as the US firm, Hallibuton.

PensionBee has now strengthened the plan and such companies are now excluded, which is a positive step.

However, the plan still invests in some of the major funders of fossil fuel expansion (banks such as Barclays and Citigroup) and other ethically dubious sectors, such as arms/defence and gambling.