Force pension funds to align with net zero goal, says Richard Curtis

Film-maker urges UK ministers to make it mandatory for schemes to align portfolios with climate target

Pension funds should face legal obligations to bring their investments in line with the net zero greenhouse gas emissions goal, the film-maker Richard Curtis has said.

Curtis, a co-founder of the Make My Money Matter campaigning group, urged ministers to follow up the UK’s legal commitment to reach net zero emissions by 2050 by making it mandatory for pension schemes to align their portfolios with the target.

He told the Guardian: “The moment has arrived. Why not invest in sustainable investments? We can see the risks of the climate crisis. This is one of the most practical changes possible.”

He added that everyone must take responsibility for their impact on the climate crisis. “People can’t say, I will sit this one out. It’s not going to go away. And [making net zero mandatory on pension schemes] is one of the levers of change.”

Ministers have been reluctant to make mandatory changes that would affect how companies invest, though at last year’s Cop26 climate summit the chancellor, Rishi Sunak, said large companies would have to disclose their exposure to the risks of the climate crisis by 2025.

But many campaigners think the mandatory disclosure of climate risk alone does not go far enough, as it does not penalise companies for investing in high-carbon activities.

Tony Burdon, the chief executive of Make My Money Matter, said: “The government needs to ensure that net zero is mandatory [on pension schemes] to help trustees. At the moment, some trustees are fearful. They think they might see a legal challenge [if they moved to net zero]. We think just the opposite – that if they do not move to net zero, they could see legal challenges.”

If the government made net zero targets mandatory on the pension industry, the default position for advisers would switch to advocating investments with a low carbon footprint, which would have a transformative effect on the UK’s investment landscape, said Burdon.

While the UK has had a legally binding target since 2019 to reach net zero by 2050, most pension funds have not shifted their portfolios to reflect this, although many of the people investing in pensions today will be drawing them by 2050. Make My Money Matter estimates that £1.7tn worth of investments in UK pension funds are not yet in line with the goal of holding global temperature rises to 1.5C, the limit targeted by the government at Cop26, and which the net zero target is needed to meet.

This includes about 70% of the UK’s largest pension schemes, many of which are older-style final salary schemes. Aligning investments with net zero would be possible for those schemes, Curtis said, pointing to the £1tn of UK pension fund investments that have already shifted to portfolios compatible with a net zero target.

“There is a very positive range of options for investors. There are very exciting companies to invest in,” said Curtis, whose films include Love Actually and Four Weddings and a Funeral. “Changing my pension [to ensure it is invested in line with 1.5C] is the biggest change I have made for the climate. It’s 21 times more effective than changing your energy provider.”

He said his son had been marching with Fridays for Future, the global movement of young people inspired by Greta Thunberg’s school climate strikes. “I’ve been very inspired by the younger generation’s focus on the climate,” he said. “Weather used to be the last thing on the news – now it’s the first thing on the news.”

Curtis said it was vital to talk to young people now about pensions and the impacts they could have on the future of the planet, rather than focus on people nearer to pension age. “It took a lot from my dad to convince me that I should get a pension at all,” he said, but added that younger people were more aware of their future as the evident dangers of climate breakdown had become more obvious, and pensions should be part of this. “Younger people are thinking about their purchases, about the impact of what they do and what they buy, their clothes and their food. Pensions are one of the most effective ways to get change.”

Fiona Harvey Environment correspondent

cover photo: Curtis is co-founder of the Make My Money Matter campaigning group. Photograph: David M Benett/Dave Benett/Getty Images