I’m disappointed that charity Make My Money Matter has closed its five-year celebrity-backed campaign to make our pensions greener. This was the most eye-catching attempt to make the public care about their pensions since the government unleashed a 10-foot-tall purple pensions monster in its 2015 TV ad campaign (he was the embodiment of auto enrolment in the workplace . . . I think).
Over the past five years, MMMM, co-founded by British filmmaker Richard Curtis, signed up a host of Hollywood stars to deliver carefully scripted and entertaining videos — explaining that “Pensions Actually”, is the way to save the planet.
Characters such as Oblivia Coalmine (played by Olivia Colman) and Benedict Lumberjack (you guessed it) encouraged some to write to their pension schemes demanding an end to fossil fuel investing.
But the problem, in MMMM’s own words, was that all this effort only ever delivered “promising pockets of progress” amid a bigger picture of continued failure. It had impact, but perhaps not enough, and not quickly enough.
Plus, the funding dried up. It seems celebrities will laudably give their time for free but perhaps not their money. “In the philanthropic world, lots of organisations like ours are not able to get funding,” says chief executive Tony Burdon, attributing this to the economy and issues such as the Ukraine war.
Nevertheless, MMMM has left us with some eye-catching claims: £300bn of pensions is invested in companies with a high risk of driving deforestation; on average, £3,000 in every pension is invested in fossil fuel companies expanding production (when it should be declining); and investing in a sustainable pension is 21x more powerful that stopping flying, going veggie and switching to a renewable energy provider.
What about those pockets of progress? When MMMM launched in 2020, only the Church of England Pensions Board had a net zero commitment. Following its campaign, more than 60 schemes made public commitments on net zero, with some £1.5tn of assets under management.
How much this is down to MMMM is debatable: there were lots of green agendas over that time. including from the Department for Work and Pensions, that I think deserves a lot of the praise. In 2021, the UK was the first country in the world to put into law recommendations of the Task Force on Climate-related Financial Disclosures. This requires large pension funds to assess their climate change risks and publish them for the benefit of savers.
Will disclosure translate to action? Burdon says: “All people can do is write to pension schemes and ask them to do better.” Over five years he says “thousands” did that after watching MMMM’s videos.
That doesn’t exactly feel like sparking the revolution. So why didn’t it work?
MMMM claims two-thirds of savers want a green pension; this chimes with DWP research from 2020, which found 73 per cent of scheme members felt strongly about environmental issues.
But appetite has clearly waned. The Association of Investment Companies found not only a drop in “fans” of ESG investing over the past three years, but a shift in which issues they consider important. Environmental issues have been dominant in previous years, now they tie with governance issues.
Burdon says the pensions issue is nobody’s fault. “Most people are dumped into a scheme that their employer chooses for them. If you’re lucky, you can invest in an ethical scheme,” he says.
But even when there is the option to do that, investors don’t tend to take it up. Interactive Investor was an early champion of sustainable investing, providing a list of recommended funds to its DIY investor customers. It reports that the most-bought sustainable funds for 2024 were Royal London Sustainable World, iShares Global Clean Energy ETF, Royal London Sustainable Leaders, Impax Environmental Markets and CT Sustainable Universal MAP Growth 3. Yet, none of these funds featured on its overall best buy lists in 2024.
Most investment platforms also report the continued popularity of the Vanguard LifeStrategy Range, which does not specifically integrate ESG considerations into its investment process or exclude companies in industries such as tobacco or oil and gas. Vanguard also courted controversy in 2022 when it left the Net Zero Asset Managers’ Initiative, a group of asset managers committed to achieving net zero carbon emissions by 2050.
And then there’s performance. Sustainable funds outperformed their traditional peers across all major asset classes and regions in 2023, according to a report by Morgan Stanley. Last year, they lagged behind. Critics have cited the political backlash against ESG, especially in the US, concerns over greenwashing and the fact that they were obviously underweight in oil and gas companies when prices rose.
The upshot is, you can have all the millionaire, A-list actors and directors you want to tell people what to do with their money, but if returns aren’t good or consistent enough, people are going to be reluctant to do it. And, with the state of retirement funding where it is in this country, we need to be maximising people’s returns, no matter how noble the cause.
The fiduciary duty of pension trustees is to act in their members’ best interests. Burdon argues that “best interests” is not just about investment returns. Certainly, the law enables trustees to say no to investments with shorter-term gains where they create longer-term sustainability risks, and they can choose to invest for positive sustainability impact. But trustees also have to contend with the outcry from members and employers if their pensions don’t keep up with the pack.
But the fight continues. MMMM’s campaigning work transfers to another charity, Finance Innovation Lab, which is coordinating a movement for “Better Pensions”.
For now, MMMM’s resources — which include a green ranking of major DC workplace pensions — will be live on its website (available free to be downloaded) for the next five years. So you can still find out how your pension scheme ranks on climate issues. And you can share an Oblivia Coalmine video with a friend or colleague. Whether you then take action to “green” your pension is up to you.
What’s needed is legislation to force pension schemes to up their game. So if you pen an email to your scheme’s trustees, copy in your MP too.
Moira O’Neill is a freelance money and investment writer. Email: moira.o’neill@ft.com, X: @MoiraONeill, Instagram @MoiraOnMoney
