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Scottish ethical finance initiative sets out roadmap for net-zero pensions

The Global Ethical Finance Initiative says pension providers should act now on climate change.

A new set of recommendations setting out practical steps for pension providers to transition to net-zero has been published by the Scottish-based Global Ethical Finance Initiative (GEFI).

The document is also being sent to all local government pension schemes across Scotland.

GEFI said the roadmap had been compiled with its “key partners,” including global investment company abrdn, which, it added, had made climate change mitigation a “top priority.”

The group believes pension providers should use the power of their investments to drive change in the companies they invest in.

It argues that divestment cannot be the primary strategy, as it just moves the problem elsewhere, and buying carbon assets should be a “last resort” to deal with residual greenhouse gas emissions, with decarbonisation being the primary focus.

Pension providers ‘need to start taking action’

GEFI’s roadmap includes a range of practical steps and actions to overcome the biggest challenges identified by its research, including reliable data on emissions and knowledge and expertise of pension fund staff and trustees prioritising climate change.

It also offers advice to pension providers on how to navigate the “plethora” of tools, initiatives and frameworks that have been developed in relation to net-zero.

Launching the document to coincide with the COP26 climate summit, in Glasgow, GEFI said:  “Pension providers should take action now on tackling climate change and delivering net -zero by 2050. However, the responsibility for net zero cannot be left solely at the door of pension providers.

“Every company, investors and the whole of society should be pushing for a net zero-carbon future.”

Natalie Jackson, executive manager of GEFI, added: “The eyes of the world being on Glasgow at COP26 presents a great opportunity for Scottish pension providers to demonstrate leadership in taking action on climate change to ensure net zero is delivered by 2050.

“Our net zero pension workstream is a direct call to pension providers to increase emissions transparency and develop a tangible strategy to set and/or deliver on net zero commitments, and the roadmap provides a credible set of actions to enable them to do this.

“Pension providers need to start taking action to combat climate change now, before it’s too late.”

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