Tax, investments and pension rules can change over time so the information below may not be current. This article was correct at the time of publishing.

How responsible investing can help against climate change

Your pension gives you influence over some of the world’s biggest companies as pensions are typically invested in many companies. You can find out if your workplace pension is invested responsibly by contacting your HR department or workplace pension provider.

Who decides where your pension is invested?

The money in your pension is being used on your behalf by the fund managers you have selected. If it is a workplace pension, it is likely that your pension will be invested into a default fund and you may not have looked into the underlying companies that you have invested in.

Fund managers decide which companies to invest in to give your pension pot the best chance of growing. As these companies grow, so does your share in it. These companies rely on investors to continue running and growing.

Large corporations are responsible for thousands of employees and billions of pounds of resources and therefore they have a huge impact on the environment.

If you decide to take a more active role in where your pension is invested and remove your investment from large corporations who are not prioritising the environment, then this will force these large companies to make big changes.

The aim of pension investments used to be based entirely on growth and financial returns. However, in the last year or so there has been a big shift in people realising the severity of the environmental crisis which has led to an increase in responsible investing.

Speak to a Financial Advisor

What is responsible investing?

Responsible investing is commonly referred to as ESG investing which stands for Environmental, Social and Governance investing. This is investing into high-profile companies that operate sustainability aiming to still achieve good returns while taking better care of the environment.

Investors who are moving their pensions away from large corporations who are not doing the best they can to reduce their environmental impact forces companies to improve their way of working. For example, investors can encourage the oil and gas sectors to transition to cleaner energy sources.

We believe that companies that do try to minimise their environmental impact are generally going to be more sustainable in the long-term meaning that we would expect them to be worth more in the future giving them the potential to deliver long-term returns. This is a good solution for pension investments as most people have long time frames for their pension investments.

Start shaping the future today

The more people that invest their pension funds responsibly, the bigger impact it will have on the world that we live in. Responsible investing is a way to build a sustainable future.

Review your pensions

If you want to review your existing pension investments or start a new pension, a financial adviser at Four Wealth Management can help you.

Book a no-obligation meeting online or call us on 0117 973 0500.

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.

Enquire Now

If you have any queries or would like to arrange a face to face meeting with an adviser for a no obligation review of your personal finances, simply book a call back using the form below. Alternatively, you can call us on 0117 973 0500.

The Partner together with St. James's Place Wealth Management plc are the data controllers of any personal data you provide to us. For further information on our uses of your personal data, please see the Partner's Privacy Policy or the St. James's Place Privacy Policy.

Share this article

Share on google
Share on linkedin
Share on print
Share on email
How responsible investing can help against climate change
FourWealth Management