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Brits unknowingly funding climate change through their pensions

Kalila Sangster
·2-min read
Photo: Getty
Half of consumers said they didn’t know where their money is invested, according to a survey. Photo: Getty

The majority (67%) of Brits are unknowingly funding the climate crisis by investing their money in savings accounts or pension funds that fund oil and gas companies and other industries that have a damaging effect on the environment, a new survey has found.

Despite 61% of respondents reporting that climate change is their top concern, 32% had pension funds that could be supporting climate change, according to the survey of 2,013 British consumers by green digital investment platform Clim8 Invest.

BlackRock (BLK), Vanguard (VPMCX) and State Street (STT), the world’s three largest money managers, use money from people’s private savings and pension contributions in their fossil fuel investment portfolios — worth $300bn (£234.3bn), according to Clim8 Invest.

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Half of consumers, in the survey, said they didn’t know where their money is invested. And 57% said they were surprised to learn their savings are being invested in companies that have an adverse impact on the environment.

Almost half (48%) felt that sustainable investments can have a meaningful impact on the planet and a quarter (25%) thought that impact investing could be more helpful for the environment than making lifestyle changes.

However, 59% said a lack of knowledge deterred them from impact investing, and 30% felt the terminology used was confusing.

“When you consider that UK consumers’ top two concerns are climate change and saving for their future, it’s clear that by having their savings and pensions with typical fund providers, they are potentially being hit by a double whammy,” said Duncan Grierson, CEO and founder of Clim8 Invest.

“On the one hand, they are unwittingly funding the very thing they are concerned about. On the other, people who stick with typical fund providers will likely get a poorer return as users move away from companies with products and services that damage the environment.”

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Research from data provider Morningstar showed that the majority of Europe-based sustainable funds have done better than unsustainable funds over one, three, five, and ten years, according to Clim8.

Grierson added: “The problem appears to be one of perception. The impact investment industry, where Clim8 is now innovating, needs to do better at educating people that there are alternatives that will deliver a great return financially and a more secure future for them and the planet.”