Pensions and the planet: how we can use our savings to reduce our carbon footprint

If you have committed to eco-friendly living, why not use the power of your pension to make a difference? 

How much do you think about the health of the planet in the everyday decisions you make?  

Perhaps you avoid excessive plastic packaging at the supermarket or eat locally grown produce to reduce food miles. At home, maybe you turn the lights off when you leave a room, do laundry at lower temperatures or take showers instead of baths? 

We know that treading lightly on the earth is increasingly a top priority: research from Mintel1 found that 71% of women and 59% of men had increased their commitment to ethical living over the past year. But while small lifestyle changes go some way towards protecting the planet, did you know that you can make a much bigger impact by using the power of your pension? 

Why does my pension matter? 

pension is a pot of money you save over your working life; it is invested so it can grow, and then you are free to choose how to take the benefits from age 55 – for example to take an income. Saving into a pension now helps to ensure you will have financial independence in the future. But while it has invaluable benefits for you and your family, a pension can have a bigger purpose too. 

When you have a pension, you are an investor, and investors are influential. By using your money to support those companies that are making positive changes in the world, you are shaping the future and encouraging better business practices from all companies. That’s how a responsibly invested pension benefits you and benefits others in society. It can make the world a better place for you and for future generation. There is a growing movement that strongly believes we should all be using our money for the greater good that is increasingly harder to ignore. 

One study2 found that moving your pension savings to sustainable investment funds can be 27 times more efficient in reducing your carbon footprint than making changes like eating less meat, using the train instead of the car, flying less and taking shorter showers. 

As you can see, the impact of putting your savings to work in the right way can be enormous. 

Doing the right thing 

An added bonus of investing this way is that companies that focus on sustainability often perform better than others4, so you don’t have to sacrifice investment returns to do the right thing. 

Look into your pension to see how it’s invested; does it align with your values and the changes you’d like to see in the world? Your employer can show you how to do this. You can also speak to a financial adviser about what responsible investing options there are and seek advice on how to help your money have the biggest impact.  

For more information or advice on planning retirement, please visit  

The value of a pension investment will be directly linked to the performance of the funds selected and the value may fall as well as rise. You may get back less than the amount invested. 

Sharon Bonfield , Commercial Research Specialist, St James’s Place Wealth Management (  

1 The eco gender gap, Mintel, July 2018
2 Nordea Group sustainable finance research; calculation based on approximately £800 per year pensions contributions over a 42-year career, yielding 9.3% annually and compounded
3 WealthiHer Report, 2019
4 From the Stockholder to the Stakeholder: How Sustainability Can Drive Financial Outperformance, Oxford University and Arabesque Partners, 2015 

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