Climate and nature: what pension scheme members want to know

by Caroline Hopper, Lead Consultant, Quietroom

We created a (free) TCFD summary that gives members what they asked for.

Showing members how their pension can help tackle the climate crisis is a proven way to help them engage with their money.

It makes 8 in 10 members feel more positive about their pension, it increases awareness of their scheme, and builds trust too, according to research from the DC Investment Forum and Nest Insight

So what do members want to know about it? We spoke to them to find out

We set out to create a member friendly summary of a Task Force on Climate Related Disclosures (TCFD) report. To help us, we asked 50 UK pension scheme members what climate information, if any, they wanted about their pension.

The result, our tried and tested TCFD summary, is free for any scheme to use for its members. It includes all the things members told us they wanted to know (and nothing more), such as:

1. How does my pension connect to climate change?

Members we spoke to were clued up on climate change – they actually asked us not to explain it to them. But they’d never made the connection between their pension and climate before.

This is because most of them didn’t know their pension money was invested. So, showing members some example investments, and how climate change could affect those investments, was very powerful.

We used the example of a shopping centre infrastructure investment, and how flooding, made more likely by climate change, could damage it.

One member said, “My generation will need pensions in the future, and climate change is definitely happening. So if we can help tackle climate change through pensions – we need that ”

2. Can you give me more investment examples?

We showed members what their money could be investing in –climate tech, solar panels, even forestry and timberland.

Almost all members said these examples were the most interesting part – and asked for more.

One said, “They make it exciting and real It makes me more motivated – and would give me more confidence to trust what this provider is saying ”

3. Is my pension protecting nature or damaging it?

Once we’d mentioned a forestry investment, lots of people wanted to know more about how their investments interacted with nature

Most asked questions along the lines of: “Am I helping it or hurting it? Is it near me? How do you measure it?”

4. How are you engaging with companies?

We talked to members about how their pension scheme likely invests in heavy polluters as well as green companies, but can use its influence to encourage them to transition.

We expected a mixed reaction, but it was overwhelmingly positive. One member said, “I appreciate that my money is giving companies the opportunity to change – we all need to be part of the solution ”

It’s time to talk to your members about climate and nature

ONS data shows that 75% of adults in the UK worry about climate change. The Scottish Widows Green Pensions Report puts this even higher at 83%.

That means a very large proportion of pension scheme members will be interested in this issue – and therefore likely to engage with it in the context of their pension.

In fact, many of the members we spoke to told us they wanted to know more about this. One said, “I hope I hear about this from my provider, I want the breakdown of where my money’s going and what it’s doing.” Some schemes are working to give their members exactly that – like the London Pension Fund Authority with its new Investing in the UK map.

Schemes have to produce a TCFD report every year. Very few (if any) members want to plough through that. But many members are interested in some of the snippets of information in it.

You can use our TCFD summary structure and wording to give members just the bits they’re interested in.

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