How climate change
could impact your
pension

What are we facing?

Climate models indicate that the world’s temperature is likely to increase above 4C by the end of this century if things don’t change. This doesn’t just threaten the quality of our day-to-day lives. It’s a risk to virtually every sector of business and the wider economy itself.

Scientists believe that our best hope is to drastically reduce carbon emissions now, limiting the rise in global temperature to 1.5C above the level it was at the start of the modern industrial era. This is what most countries in the world have committed to in the Paris Agreement.

How will it affect you?

The economy and the environment are so closely linked that if we don’t act, the UK could see huge changes by the end of the century:

As could the rest of the world:

All this could significantly impact whether companies can make profits in the future, shrinking your pension pot while raising your costs of living.

Climate change won’t just affect your financial health either. Pollutants linked to climate change are known to cause cancer, asthma, strokes and heart disease, and air pollution alone causes 43,000 premature deaths in the UK every year.

How can I help make a change?

You already are, along with over 13 million other Nest members. As a pension saver, you’re a stakeholder in global financial markets. Your Nest pension savings are held in everything from the world’s biggest companies to sectors like food or transport.

And it’s your pension that gives you power.

We manage over £41 billion on behalf of members like you. By changing how this money is invested, we stand a chance of changing how businesses and industries around the world operate. That’s why our new climate change risk policy matters.

You’re not alone in wanting to build a better world.

• 66% think the UK should try as hard as possible to reduce its carbon emissions by as much as possible, even if other industrialised nations don’t
• three quarters of Nest members say responsible investment is important to them
• 71% of UK savers would opt for a fully or partially sustainable pension if they had the choice

Providers that don’t take climate change into account risk more than your money. They risk your future.

That means we'll:

• transition our portfolio to the 1.5C global warming limit
• put more money into renewables and green technology
• encourage businesses we invest in to act sustainably
• reduce how much money goes to the biggest greenhouse gas polluters
• stop investing in the most harmful fossil fuels
• work to reduce our portfolio’s impact on nature and biodiversity
• stop working with companies and fund managers that aren’t aligned with the Paris Agreement
• partner with non-profit campaigners like Climate Action 100+ to address environmental issues and encourage businesses to change
• lobby for the UK pensions sector to be more transparent about its contribution to climate change

We’re one of the first UK pension providers to commit to these standards but it shouldn’t stop with us. By March 2020, UK pension savers collectively invested £6.5 trillion in the global economy. If money talks, that amount of money shouts – and we want to encourage our fellow providers to make climate change a priority too.