Online pension provider PensionBee is launching a fossil fuel-free pension, which it claims is the first mainstream product of its type.
The Fossil Fuel Free plan will exclude companies with oil, gas or coal reserves, as well as tobacco companies and manufacturers of controversial weapons.
PensionBee has partnered with Legal & General to design the fund, after seeing growing demand from its customers.
Eco message: The Fossil Fuel Free plan will exclude companies with oil, gas or coal reserves, as well as tobacco companies and manufacturers of controversial weapons
The provider is currently going out to its customer base to seek commitments to join the fund. It needs to hit a target of £100million in pledges in order to be able to offer the fund at its planned fee of 0.75 per cent. It hopes to hit this sum by the end of the year and will then offer the fund to all new and existing customers.
Clare Reilly, head of corporate development at PensionBee, says: ‘People make choices about the food they eat and the companies they choose to engage with based on their values – we want to give them the power to do the same with their pensions.’
The low-cost fund will invest in global companies, with Microsoft, Apple and Mastercard among its largest holdings.
The launch comes as Prime Minister Boris Johnson is expected to announce a ten-point plan to tackle climate change and reach net zero emissions by 2050.
Chancellor Rishi Sunak has also just revealed that large companies and financial institutions will have to reveal their exposure to climate risks within the next five years.
Reilly credits Comic Relief campaigner Richard Curtis with piquing savers’ interest about where their pensions are invested.
Curtis this year set up Make My Money Matter, a national campaign urging savers to put their pensions into investments that tackle climate change.
The campaign claims that making your pension sustainable can be 27 times more powerful at cutting your carbon footprint than giving up flying and becoming a vegan.
Since then, Nest, which is the largest pension scheme in the UK, announced a plan to decarbonise the fund portfolios of its nine million members.
It will stop investing in companies involved in thermal coal, oil sands and arctic drilling by 2025 at the latest, unless they have a plan to phase out all related activity by 2030.