Do you remember when pensions were a bit *yawn* boring? And kind of - meh - depressing?

All that nagging about getting old and watching the pennies. Droning on like a vacuum cleaner, while we’re trying to focus on getting things done in the here and now.

Well, not anymore! Because it turns out that simmering under the surface YOUR pension has the power to change the world. Like an undercover superhero, it’s ready to rip off its shirt, fling away the chunky glasses and fly off to do some good. That’s right – you have a bona fide Clark Kent just waiting to be unleashed. Or (since the studies show that it’s women leading the way) let’s call our pension ‘Wonder Woman’ instead. Much better.

With just a phone call, email or a few clicks online, here are some of the most epic superhero ways that your private or workplace pension can change the world.

Super step 1: Take money away from fossil fuel energy companies

The top twenty fossil fuel companies are responsible for one third of carbon emissions since 1965. Isn’t that crazy? Flooding and non-stop rain around the UK, devastating locust swarms in Africa, uncontrollable bush fires in Australia and California…a third of that was fossil fuel companies.

They are burning the planet alive. And soon, as dry summers cause gargantuan forest fires, warming the planet further, the damage will be irreversible. It’s MEGA scary. It’s infuriating. And it’s still going on. New drilling projects are going ahead. In 2020, BP created three new oil fields. Around the world, there are more than 200 oil companies drilling into our planet and sucking up those precious non-renewable fossil fuels.

Those humongous oil pipelines and drilling projects do not come cheap. Each kilometre costs upwards of $2.5 million. BP’s latest deep water oil field, Atlantis phase 3, is estimated to have cost $1.3 billion to develop.

So where do they get the money? …Well…Uhhh…This is awkward. I hate to be the one to say it but…a lot of it comes from our pensions. Our workplace pensions. Yep.

We are literally investing our work savings into our own demise. Massive whoops. The exact amount that you’ve been investing depends on your unique situation. But to give you a flavour, in 2019, each of the 6.8 million people invested in their local government scheme handed over an average of £1,450 to fossil fuel companies via their workplace pension. £9.9 billion in total. Going straight to new drilling projects and fossil fuel carbon emissions.

What you can do: Instruct your pension provider not to invest any more of your money in fossil fuels, and to divest what’s already there. Plus, as a bonus, many investors say that oil is a ‘stranded asset’, destined for a future of losses. So, you may be improving your retirement income too. Score! To start, you could look at transferring your workplace pension to a provider such as Nest or EQ investors. 

Super step 2: Put your money into green energy companies

Now we’re talking! Putting your money into green energy companies makes you a super valuable part of the future. So, as you get busy in your work life and rake in that cash, you’re helping the world breathe with your pension. Nice one!

With time, more and more energy companies will transition to become renewable. It’s a huge part of the EU’s Green Deal, as well as the UK’s ten-point-plan for a green industrial revolution. So, getting ahead now could pick you up a tidy profit to boot.

Soon there will be many renewable stocks to choose from, but my favourite has to be Ørsted, a Danish company who switched from dirty to clean energy a few years ago. Ørsted were able to make this transition thanks to a Green Bond, a type of investment that you could also have in your pension, if you wanted to. Ørsted worked hard at improving, and in 2020 they were named the most sustainable company in the world! Green bonds can help save the planet.

I love Ørsted because they didn’t talk the talk so much, but they really walked the walk. When you look at green energy companies to invest, watch out for ones which do a lot of talking, but not a lot of walking. Known as ‘Greenwashing’, there is a lot of hyperbole and overblown marketing which doesn’t add up to much in this industry.

If you’re looking for inspiration, investment platform Tickr usually has some good green energy companies you can check out.

What you can do: Check what you’re invested in. The official word for the list of companies and investments in your pension is, ‘holdings’. You normally check this online. Look beyond the top 10 and check that you’re happy with the green companies you’re invested in.

Super step 3: Slash your carbon emissions in a matter of clicks

This will blow your mind. I already know what I’m about to type next, but my brain still pops every time I type it. Ok… Here we go.

By moving your pension to sustainable funds, you will prevent a mind-blowing, eyebrow-raising, need-to-sit-down-now-staggering 2,222.67 TONNES of carbon from being emitted into the atmosphere. 2,222.67 tonnes.

For context, the average family emits around 10 tonnes in total each year. And you can save more than 2,200.

Yeah. Crazy, right? That’s 220 families’-worth of carbon emissions in just a few clicks. If you can spare half an hour to switch to a sustainable fund, it will probably be the single most impactful thing you can do for the planet in your lifetime.

What you can do: If you haven’t already … Simply switch your pension to a sustainable version. And soak up that good karma.

…Want to go further?

I’ve focused in on carbon emissions here, but there are oodles of environmental, social and governance movements that need your support too. And your pension is the best way to invest for the world you want to live in.

If you’re bored of fusty male-dominated companies, your pension is an excellent way to invest in those which have a mix of men and women in power. According to the research, you’d be more likely to make more money too, as findings by Goldman Sachs reveal that more women on the board leads to surges in performance.

Or if you want to put your money towards better social justice, your pension is a great way to do it. For example, studies show that Black-owned businesses suffer from an unfair lack of investment. As an investor, this could offer you a unique opportunity to invest in undervalued stock, while levelling the playing field. A great place to stay on top of the latest updates and opportunities is the newsroom of Impact X, a venture capitalist firm with a focus on Black-owned investments.

What you can do:

Instead of having someone else make your decisions, you can create your own pension pot and fill it with the companies you love. If you’re based in the UK, it’s probably best to start with a self-invested personal pension (SIPP). You should even be able to get your work pension transferred into your SIPP for maximum impact. … Time to save the world? Let’s go Wonder Woman!

Want to get started? Check out our 11 Dos and Don’ts of Investing

Disclaimer

AllBright cannot guarantee that all of the information provided in this video or article is accurate. Use the information provided on our website at your own risk. If you wish to make an investment you should seek independent financial advice before doing so, and ensure that you have carried out your own research on the product or company that you are investing in. Any advice provided is not tailored to anyone’s individual situation, as each individual is in a different situation. AllBright does not accept any liability whatsoever for any action taken or losses incurred as a result of the information provided on our site.