Malcolm’s sustainability pledge: Greening my pension

In November 2021, London Vet Show began just as the COP26 climate summit drew to a close in Glasgow. Unsurprisingly, while activists shone a light on the increasingly urgent need to make a difference to our way of living, governments prevaricated over long-term changes to the carbon economy.

As BVA invited everyone at the Show to make a sustainability pledge, I had to think carefully about what I wanted to pledge. Of course, I wanted something meaningful, but it also needed to be achievable, so I settled on making a difference to my pension. I admit this might not sound as exciting and immediate as buying an electric vehicle or putting solar panels on the roof, but your investments may, in fact, be one of your most significant impacts on people and planet.

What’s your pension funding? 

According to the ethical pensions campaign Make My Money Matter, if UK pensions were a country, they would be among the top 20 greenhouse emitters in the world! So, if you want to create a green, sustainable, net-zero carbon economy, then you can actually help by investing in it, through your pension. The alternative may be that your pension has a substantial investment in fossil fuels, alongside tobacco and arms, so it’s definitely worth considering.

Since 2018, all employers must have a workplace pension scheme, so the chances are that you have a pension growing somewhere. It’s easy to think of it like moss growing in an underground vault, just automatically getting bigger and bigger, but it grows because you have invested in something. What is yours invested in?

As I found out, the chances are it’s invested in the default option, so one of the first things you can do is find out what options you have through your workplace pension. If you are an employee, you can ask what fund your pension is in and where that money is invested. It may be a shock to find out where your money is. It’s worth watching the TED talk by Bronwyn King, an Australian oncologist, who discovered that much of her pension was invested in tobacco! Hopefully, your workplace pension can offer you an alternative fund that matches your values, but if it doesn’t, you may be able to ask for other options and create some change.

Getting my pension under control

As I’ve worked through different parts of my career, I’ve collected several different smaller pension funds. It was surprisingly easy to find information about where they were all invested, and not unexpectedly, there was no bias towards any form of sustainability.

Having sought advice, I decided the best option for me was to bring them all together into one self-invested personal pension (or SIPP). The thought of all the admin was not very inspiring, but it only took a couple of hours of paperwork, and within just a week, I was master of my investments and wondering where they would be best invested. Never before had I felt any control over my pensions.

At this point, you either need to have a good understanding of investments or seek help from an independent financial advisor. I realised it’s unwise to invest the whole lot in one manufacturer of wind turbines blades, even if your heart says the future is in wind energy! I took advice on what was best for me, and have now split my pension into different investments, all with green credentials. It didn’t take as much work as I thought, and it’s exciting to know that I no longer own shares in fossil fuels, uranium mining, and tobacco.

It’s easier than you think

I found it a challenge to know where to start with making sustainable changes to my own life, but it turned out to be surprisingly easy to move my pensions, and the bonus is that I now feel I have much more control and understanding of them.

BVA’s insurance and financial services partner Lloyd & Whyte is running a free webinar on ‘The case for sustainable investing’ at 7pm on Tuesday 1 February 2022 via Zoom. Register in advance to attend. BVA members can also contact Lloyd & Whyte for a complimentary financial review and learn more about Socially Responsible Investing (SRI) and options to promote sustainability.