How 'clean' is your pension? Why your savings could be influencing your carbon footprint

Posted 16.03.2020

We’re faced with it in the news every day; images of children on the streets demanding change, school climate strikes, melting ice caps crashing into the sea. As a result, many people are taking a proactive look at what they can do to reduce their carbon footprint, and businesses and governments are running to keep up, with strategy and policy change.

Some of the more common approaches to personally reducing our impact on the environment include eating less red meat, travelling on foot or by public transport, or switching to a renewable energy provider. These are all relatively simple and affordable changes that can be made to our daily lives in our efforts to reduce the speed and consequences of climate change for future generations.

However, it is less common to take stock of your pension holdings in this context. Few people know that in the fight against climate change, your pension and savings holdings can have a significant impact on your carbon footprint. According to Nordea (2017), investing your savings in sustainable funds can have up to 27 times the impact of adaptations such as reducing meat intake, changing travel habits or conserving energy in the home.

St. James’s Place are proud to take a strong stance on sustainability and responsible investing, through visibility of environmental, social and governance (ESG) factors in the investment process, and an A+ rating with the United Nations Principles for Responsible Investment (UNPRI).

Through St. James’s Place, Rhodes Wealth Management also offers a dedicated Sustainable and Responsible Equity Fund, managed by Impax. The fund does not invest in tobacco, oil or gas companies and benefits from 44%  less exposure to carbon intensive companies than a typical equity fund*.

Sustainable investing does not necessarily result in reduced returns, with a research paper by Nordea markets showing that leaders in sustainability significantly outperformed organisations with a poor ESG rating.

Rhodes Wealth Management encourages sustainability in the workplace, with a 2020 new client initiative in association with The National Forest. For every new client joining us, we plant a tree.

If you’d like to take stock of your options or explore the St. James’s Place Sustainable and Responsible Equity Fund, please contact the team today on 01332 497670.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select, and the value can therefore go down as well as up. You may get back less than you invested. Past performance is not indicative of future performance.

Nordea, Sustainable Finance at Nordea, 2017

*Source: MSCI ESG Research LLC, May 2019