Skip to main content

Pension Funds: Investment

Question for Department for Work and Pensions

UIN 270720, tabled on 28 June 2019

To ask the Secretary of State for Work and Pensions, whether she is taking steps to ensure that pension companies declare investments in the fossil-fuel industry; and if she will make a statement.

Answered on

3 July 2019

The Government recognises that climate change is a key national and international issue we have made sure that pension schemes understand their role responding to its effects. In September 2018, following extensive consultation with the pensions industry, this Government laid regulations (https://www.gov.uk/government/consultations/pension-trustees-clarifying-and-strengthening-investment-duties) to clarify and strengthen trustees’ investment duties, including taking account of the financial risks of climate change when developing their investment strategies. There has been extensive stakeholder engagement since. The regulations come into force from October this year.

Defined contribution occupational pension schemes will be required to publish their policy on consideration of climate risks by October 2019, with most defined benefit schemes being required to follow suit by October 2020.

The FCA are consulting on corresponding provisions for workplace personal pension schemes. As the Minister for Pensions and Financial Inclusion I have spoken extensively about the new requirements and the Government expectations of pension schemes, including at the Westminster Hall debate regarding Pension Funds: Financial and Ethical Investments on the 22 May 2019:

“For too long there has been a perception by too many trustees -I am happy to clarify this as a Government Minister- that the environmental practices of the firms they invest in are purely ethical concerns, which they do not need to worry about: that is utterly wrong. Aside from the ethical considerations, there are real financial risks resulting from climate change. With the long-term horizons of pension investing, trustees must now consider that when they set out their investment strategies. Trustees who do not consider those matters will be breaching their statutory and potentially their fiduciary duties not only to current but future members.”

The full debate can be viewed here:

https://hansard.parliament.uk/commons/2019-05-22/debates/D3194408-7581-4635-AEDC-6D22AD6F0EBC/PensionFundsFinancialAndEthicalInvestments

The Government is very keen to support trustees in making responsible investment decisions.

Named day
Named day questions only occur in the House of Commons. The MP tabling the question specifies the date on which they should receive an answer. MPs may not table more than five named day questions on a single day.