Green returns - the power of your pension

The opening poll revealed that 86% of respondents knew how much money was in their pension, yet 57% were unsure as to how to find out where that money was invested.

Chris highlighted that, whether we are aware or not, our off-the shelf pensions will all be invested in the largest oil, gas, tech, and agricultural industries. The two tables below highlight some statistics - the top 5 meat and dairy companies emit more annual greenhouse gasses than Shell, and that between 1965 and 2027, 20 firms (all oil and gas giants) produced ⅓ of global CO2 emissions.

In figuring out how to play your part amongst these startling figures, Chris stressed valuable advice - building first your own set of sustainability principles and secondly an investment portfolio that matches these. This will grant real control over your investments.

For those questioning financial advice, Chris pointed to unbiased.co.uk which details that those who seek advice are on average £48,000 better off over a 10-year period. Seeking advice will help to demystify the area and create an achievable and accessible financial plan in-line with our principles.

Below are some helpful key steps to take in actioning how to begin moving our money to places that align with our green principles:

A topical discussion followed, led by curious businesses in Tunbridge Wells. A hesitancy emerged to push employees down the ESG route when investing their pension funds due to concerns that sustainable funds may not keep up the same growth rates. In response, Chris pointed to the role of the ‘Sustainable Investment Pack’, offered when seeking financial advice, in ensuring that sustainable investment practices are tailored to peoples’ attitude to risk. He mentioned that the risk associated with sustainable and ethical investing is far from what it was 10 years ago.

Are sustainable funds mainly composed of green startups or larger companies doing slightly better on the sustainability front? There certainly is an increasing presence of smaller companies in these funds, said Chris, and this will of course have an associated risk. Concerns were expressed that switching the funds of a company pension will impact hundreds of employees and there is a duty to keep returns high. Chris encouraged inviting an advice firm into the business to help the company build a portfolio that is appropriate for their needs and risk tolerance.

Different attitudes towards risk-taking within business ownership were also discussed. With higher-risk ethical funds performing similarly than low-risk funds over a longer period of time, one attendee asked for advice on how to encourage others to switch. Chris suggested delving into the intricacies of where the money is being invested, often revealing a lack of alignment with people’s values. Moving a small percentage into ethical funds is often a good place to start, keeping overall risk the same. To check that the funds are ethical, Chris prompted the attendee to approach the advisor that set up the pension. Asking about the parameters that the fund manager is working under will reveal the scope of companies that the manager is able to invest in, allowing you to explore their values.

Our host Christina made some wise contributions to the ongoing discussion. Christina commented that ensuring your pension is invested responsibly is a relatively straightforward way to action sustainability compared to other methods - for example, carsharing! She also guided attendees towards the number of regenerative farming, plastic, and carbon credit schemes that companies can buy into in the UK to support green initiatives. Chris followed that he had observed the growth of credit schemes in recent years and encouraged the audience to get involved.

The process can seem daunting but it’s important to remember that you don’t need to change everything today. Just investing a small amount of your pension in a sustainable fund is a great start, depending on how cautious you feel. The best thing you can do is just start.

Chris concluded that what you do does make an impact and that taking that bold first step can encourage others to follow suit, building momentum like a snowball rolling down a hill. Money talks - you can choose for it to be a power for good… or not!

For more information about Hall & Gertski Wealth Management, head to their website or follow Chris on LinkedIn.

Next Steps

We look forward to welcoming you as we continue our series. Make sure that you join us for our next webinar on Wednesday the 11th June from 9:30am to 10:30am on ‘Getting Your Suppliers on Board with Sustainability’. Tony Mayer, Procurement Director at COOK will be sharing how they overcame challenges around meaningfully engaging with their supply chain and built meaningful relationships for their sustainability journey. A guest farmer will also bring their perspective on what being a supplier is like to a company that has sustainability as a core value.

Make sure that you register for tickets here.

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