A recent survey by Make My Money Matter found that almost half of UK savers, around 18 million people would be happy to switch to a green pension if their provider offered it.
The survey found that 61% of respondents want their retirement savings to be used to help fight climate change, and 53% want their pension to ‘do good for both the people and the planet.’
How to invest in a green pension?
A green pension refers to the potential to invest in ways that reflect ESG values. ESG represents environmental, social and governance factors, and these are considered alongside financial considerations when fund managers assess investment opportunities for your pension fund. It could also be referred to as socially responsible investing, impact investing, values-based investing, and sustainable investing.
What do fund managers consider when investing sustainably?
For more information read our Sustainable Investing brochure.
Environmental factors refer to how companies are performing in their stewardship of the environment, for example:
- Carbon footprint
- Energy consumption
- Greenhouse gas emissions
Social factors consider how companies are manage relationships with employees, suppliers, customers, and the areas where they operate, for example:
- Human rights and social justice
- Working conditions and employee relations
- Health and safety standards
Governance factors focus on company leadership. For example:
- Board diversity, structure and pay
- Avoidance of bribery and corruption
- Management & culture
‘Many retail clients are asking about sustainable investing options and as we are independent, we offer a variety of sustainable funds so you can achieve your goal of investing in a green pension fund. Through Morningstar we can check a fund’s sustainability rating so you can be confident that you are investing sustainably. For more information read: How our Lonsdale financial advisers measure a fund’s sustainability rating.’
‘It is never too early to start saving into a workplace pension as it provides income when you retire and leave working life. If you are not currently saving into a pension, we recommend you review your employer’s workplace pension, as you will benefit from your employer making regular pension contributions too, and you can claim pension tax relief. If you are interested in sustainable investing hopefully your employer can offer you a green option. It is also tax efficient to invest in a workplace pension or save into a personal pension if you are self-employed, as you can claim pension tax relief from the government. For more information read: A beginner’s guide to investing.’
Green pension options for companies looking to set up a workplace pension
Lonsdale Services also offers employee benefit consultancy advice, and we can recommend sustainable pension options for companies who are setting up workplace pension schemes. For more information complete our booking consultation form and one of our benefit consultants will be in touch. Alternatively call our financial advisers on 01727 845500.
The value of an investment and the income from it could go down as well as up. The return at the end of the investment period is not guaranteed and you may get back less than you originally invested. The contents of this article are for information purposes only and do not constitute individual advice.
Read more about Sustainable Investing
How important are the UN sustainable goals for investing?
What is the Make My Money Matter campaign?
Does your IFA offer investments that do good for society?
Sustainable investing and the benefits to you and the environment
Passive v active investing?