Responsible investment: why it matters
Deforestation in Argentina, August 2006. Photo: Benjamin Pender
Your pension may be buying more than you think. While growing a nest egg for your retirement, it could also be paying for environmental destruction, illegal arms sales or unfair labour practices. That's because the money you pay into your pension fund each month may be invested in businesses with irresponsible practices.
Through pension investments:
- Environmentalists could be investing in logging companies that cause deforestation
- Women could be funding sexist pay scales
- People who oppose war may be supporting illegal arms sales
- Trade union members could be invested in companies that use child labour
Unwittingly, you could be financing practices you find abhorrent!
It's your money. You have the right to decide how it's used. Click here to join the FairPensions campaign for responsible investment. Becoming a supporter is free and will enable you to take action and also receive regular updates.
Your money
Because investing seems so confusing many of us hand it over completely to the City firms that manage our pensions. But let's not forget that it's our money they're investing, and an important financial asset at that. It's fair to expect your pension investments to reflect your values and also bring in decent returns. And research shows that engaged investors get equal or better returns to those who don't engage with companies in their portfolio (click here for a recent study by the United Nations Environment Programme Finance Initiative and Mercer).
The good news is that pensions funds in the UK are now required by law to outline their responsible investment policy. That's a start. But your action is needed! Pension funds will only be convinced about responsible investment when they hear how important it is to their customers. They need to hear from their members; you and I.
In turn, pension funds can use their position as major shareholders to press companies to adopt more responsible practices. Through this process of engagement, better environmental or labour practice can be encouraged. That way your pension fund can help build a more sustainable future for everyone.
It's your money, you have the right to decide how it's used. Join the FairPensions campaign for responsible investment! Click here. Becoming a supporter is free and will enable you to take action and also receive regular updates.