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Warning to industry

Pensions leaders told to follow Greta’s call on climate change

Richard Butcher

Richard Butcher: warns of a dereliction of duty (pic: Terry Murden)

Pensions industry leaders will today be urged to “go beyond minimum compliance” and do more to tackle the risk posed by climate change.

Richard Butcher, chairman of the Pensions and Lifetime Savings Association (PLSA), will say that climate change affects every sector and demands a change in how the industry behaves.

Against a backdrop of falling share prices driven by the impact of the coronavirus, Mr Butcher will tell 1,000 delegates attending its annual conference in Edinburgh that, thanks in part to Greta Thunberg and Extinction Rebellion, savers want pension schemes to act on their environmental responsibilities.

“Climate risk is a systemic risk which affects every sector, every business model and, at its extremes, every company,” Mr Butcher will say.

“And that means, as investors or advisers to investors of over a trillion pounds, it affects us, the members of the PLSA. We simply cannot ignore it. Indeed, in my view, if we were to it would be a dereliction of our duty.”

The PLSA has been engaged in investor initiatives such as Climate Action 100+. The Church of England Pension Fund and the £30bn Brunel pool – which recently threatened to sack investment managers that do not take action on the climate crisis.

Funds and savers are investing more for good and engaging with their investee companies: €2.84trn of UK managed assets were voted at AGMs on sustainability grounds, according to a 2018 UKSIF study.

Climate risk regulation is on the rise, too. The new ESG rules that apply to trustees, and the analogous requirements being imposed on personal pension providers through the mechanism of their IGCs, will help to change more of our collective behaviour so that it is focused more on long term risk, and particularly, on climate risks.

“But, although these rule are a start, they are not, in our view, enough,” Mr Butcher will say.

We have a fiduciary and a social responsibility to go beyond minimum compliance

– Richard Butcher, PLSA

“We are not arguing for an increase in regulation, but we do believe we have a fiduciary and a social responsibility to go beyond minimum compliance.”

The PLSA Investment Conference takes place in Edinburgh from 11-13 March and brings together pension professionals including CIOs, pension managers, trustees, consultants and finance professionals and their advisers for the UK’s largest conference of its kind.

Delegates who had visited any of the areas of the world most affected by the coronavirus were asked not to attend.

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