They have the power to fight climate change and change the world, but some of them need to get a move on. Bex Hay of ShareAction writes about how pension funds are doing in tackling the biggest environmental threat of all.
In the last three months, the Pension Power movement has contacted over 150 of the biggest pension funds in the country, challenging them for answers on: how much of our pension money is currently invested in industries supporting a low-carbon future and whether they will commit to a target for increasing these investments.
The answers are more varied than a tin of Quality Street (with a few ‘green’ triangles), so here’s a breakdown of the good, the bad and the ugly of where our pension funds stand – and how we can continue to keep the pressure on. Where does your fund fit in?
Pension funds making progress to fight climate change
Scoring the ‘Toffee Deluxe’ for action on climate change, these funds – some through prolonged pressure from savers – have committed in some way to tackle climate risk and are investing in sustainable alternatives. Importantly, they are communicating what they’re doing to protect people’s pensions in the long term. Some examples include:
– A target to steer at least 25% of assets into the green economy by 2015 (The Environment Agency)
– Proactively investing in renewables and green tech, Lancashire County Council Pension Fund has committed up to £200m to various clean energy and waste reduction funds, including a UK solar co-operative
– In response to all the emails, the Pensions Trust has confirmed it is formulating a climate change policy and assessing the carbon footprint of its investments, in line with ShareAction’s Green Light report
– Using the Environmental Opportunities index by FTSE, the Railways Pension Scheme invested in 97 out of 100 of these projects, with a value of around £289m – and has committed to exploring more low-carbon options
What next? It’s a good start, but even these pension funds could to be doing more. Some could be open to meeting with their members to explore further action. If you are in one the funds mentioned, or have a similar reply, please email firstname.lastname@example.org.
Pension funds who need more encouragement
While not making explicit commitments, these funds are demonstrating some promise by taking the time to engage with their members and admitting that climate change needs to be taken seriously:
– After a high volume of emails and a lobby by members outside the institutions meeting, the CEO at USS came out to talk to them, agreeing to answer their questions in the meeting and follow on the discussion later
– At West Yorkshire Pension Fund, campaigner Tim Padmore went along to the annual general meeting for members – asking challenging questions on whether they will fight climate change, and has now entered a longer term dialogue directly with his fund to address the answers
– One of the largest insurance companies, Aviva, also responded to a high volume of emails with interest to engage further with its customers on climate change, and consider ShareAction’s Green Light report in the next steps.
What next? These funds are open for further engagement – and need to be pushed to commit to a low-carbon economy. ShareAction is assisting campaigners to keep the pressure on. If you are interested in getting involved, and might like to attend a training to find out more, please email email@example.com.
The ‘room for improvement’ camp
Some funds have mentioned restrictions on their fiduciary duty (a duty to maximise returns for their savers) as a reason to not consider environmental or social issues in their investments. This is an outdated (and incorrect) view of fiduciary duty, which also ignores the financial risk posed by climate change to people’s pensions.
A few pension funds honestly acknowledge that they couldn’t answer the questions. While not entirely reassuring, this means the savers could follow-up by asking what alternate steps the pension fund was taking to manage the risk of climate change.
What next? These pension funds can be sent back to the starting block with a mythbuster on fiduciary duty. If you have received a response along these lines please get in touch at firstname.lastname@example.org.
Can I get a translator please? The ‘fob off’ and the ‘fudged’ response
From sending a link to a customer complaints form, to a full breakdown of holdings in sustainable industries, some of us have been bombarded with jargon, possibly designed to deter further correspondence.
Although a few funds replied with what, at first glance, seemed to be fairly comprehensive overview about their ethical investment practises and company engagement strategies, they failed to actually answer the question about whether they will commit to low-carbon investments.
What next? The fudgers can’t escape the question forever. If you forward your response to email@example.com, the ShareAction team can help you by drafting a suitably polite response that suggests, while acknowledging that the information that they’ve sent is interesting in its own right, an answer to the question you actually asked would be nice.
We’re still waiting…
A couple of big pension funds, including those who have joined the new auto-enrolment market, have yet to respond to their emails.
We trust a significant proportion of our savings to our pension funds – so they must be accountable to their members. The financial crisis has damaged people’s trust in the entire financial sector so by refusing to reply to members’ emails these funds are perpetuating the idea that they are vast, unaccountable institutions, indifferent to the people whose money they invest.
What next? Get in touch with the ShareAction team and we’ll see what can be done to chase your fund. Remember, it’s your money, and you’ve got a right to a reply.
So there you have it. It’s a mixed bag, with some real promise and some woeful underachievers. But for every fund trying to dodge the question, there’s been some encouraging commitment to addressing climate risk – and the pressure of the pension power movement is being felt across the industry.
Bex Hay leads on the digital engagement and strategy of ShareAction’s campaigns. She joined in July 2013 and has previously worked with a number of campaign organisations including ActionAid UK, 38 Degrees and Love Music Hate Racism. She holds a BA in modern history and politics from the University of Oxford. This article originally appeared on the ShareAction blog.
Will Self-Driving Cars Be Better for the Environment?
Technologists, engineers, lawmakers, and the general public have been excitedly debating about the merits of self-driving cars for the past several years, as companies like Waymo and Uber race to get the first fully autonomous vehicles on the market. Largely, the concerns have been about safety and ethics; is a self-driving car really capable of eliminating the human errors responsible for the majority of vehicular accidents? And if so, who’s responsible for programming life-or-death decisions, and who’s held liable in the event of an accident?
But while these questions continue being debated, protecting people on an individual level, it’s worth posing a different question: how will self-driving cars impact the environment?
The Big Picture
The Department of Energy attempted to answer this question in clear terms, using scientific research and existing data sets to project the short-term and long-term environmental impact that self-driving vehicles could have. Its findings? The emergence of self-driving vehicles could essentially go either way; it could reduce energy consumption in transportation by as much as 90 percent, or increase it by more than 200 percent.
That’s a margin of error so wide it might as well be a total guess, but there are too many unknown variables to form a solid conclusion. There are many ways autonomous vehicles could influence our energy consumption and environmental impact, and they could go well or poorly, depending on how they’re adopted.
One of the big selling points of autonomous vehicles is their capacity to reduce the total number of vehicles—and human drivers—on the road. If you’re able to carpool to work in a self-driving vehicle, or rely on autonomous public transportation, you’ll spend far less time, money, and energy on your own car. The convenience and efficiency of autonomous vehicles would therefore reduce the total miles driven, and significantly reduce carbon emissions.
There’s a flip side to this argument, however. If autonomous vehicles are far more convenient and less expensive than previous means of travel, it could be an incentive for people to travel more frequently, or drive to more destinations they’d otherwise avoid. In this case, the total miles driven could actually increase with the rise of self-driving cars.
As an added consideration, the increase or decrease in drivers on the road could result in more or fewer vehicle collisions, respectively—especially in the early days of autonomous vehicle adoption, when so many human drivers are still on the road. Car accident injury cases, therefore, would become far more complicated, and the roads could be temporarily less safe.
Deadheading is a term used in trucking and ridesharing to refer to miles driven with an empty load. Assume for a moment that there’s a fleet of self-driving vehicles available to pick people up and carry them to their destinations. It’s a convenient service, but by necessity, these vehicles will spend at least some of their time driving without passengers, whether it’s spent waiting to pick someone up or en route to their location. The increase in miles from deadheading could nullify the potential benefits of people driving fewer total miles, or add to the damage done by their increased mileage.
Make and Model of Car
Much will also depend on the types of cars equipped to be self-driving. For example, Waymo recently launched a wave of self-driving hybrid minivans, capable of getting far better mileage than a gas-only vehicle. If the majority of self-driving cars are electric or hybrids, the environmental impact will be much lower than if they’re converted from existing vehicles. Good emissions ratings are also important here.
On the other hand, the increased demand for autonomous vehicles could put more pressure on factory production, and make older cars obsolete. In that case, the gas mileage savings could be counteracted by the increased environmental impact of factory production.
The Bottom Line
Right now, there are too many unanswered questions to make a confident determination whether self-driving vehicles will help or harm the environment. Will we start driving more, or less? How will they handle dead time? What kind of models are going to be on the road?
Engineers and the general public are in complete control of how this develops in the near future. Hopefully, we’ll be able to see all the safety benefits of having autonomous vehicles on the road, but without any of the extra environmental impact to deal with.
New Zealand to Switch to Fully Renewable Energy by 2035
New Zealand’s prime minister-elect Jacinda Ardern is already taking steps towards reducing the country’s carbon footprint. She signed a coalition deal with NZ First in October, aiming to generate 100% of the country’s energy from renewable sources by 2035.
New Zealand is already one of the greenest countries in the world, sourcing over 80% of its energy for its 4.7 million people from renewable resources like hydroelectric, geothermal and wind. The majority of its electricity comes from hydro-power, which generated 60% of the country’s energy in 2016. Last winter, renewable generation peaked at 93%.
Now, Ardern is taking on the challenge of eliminating New Zealand’s remaining use of fossil fuels. One of the biggest obstacles will be filling in the gap left by hydropower sources during dry conditions. When lake levels drop, the country relies on gas and coal to provide energy. Eliminating fossil fuels will require finding an alternative source to avoid spikes in energy costs during droughts.
Business NZ’s executive director John Carnegie told Bloomberg he believes Ardern needs to balance her goals with affordability, stating, “It’s completely appropriate to have a focus on reducing carbon emissions, but there needs to be an open and transparent public conversation about the policies and how they are delivered.”
The coalition deal outlined a few steps towards achieving this, including investing more in solar, which currently only provides 0.1% of the country’s energy. Ardern’s plans also include switching the electricity grid to renewable energy, investing more funds into rail transport, and switching all government vehicles to green fuel within a decade.
Zero net emissions by 2050
Beyond powering the country’s electricity grid with 100% green energy, Ardern also wants to reach zero net emissions by 2050. This ambitious goal is very much in line with her focus on climate change throughout the course of her campaign. Environmental issues were one of her top priorities from the start, which increased her appeal with young voters and helped her become one of the youngest world leaders at only 37.
Reaching zero net emissions would require overcoming challenging issues like eliminating fossil fuels in vehicles. Ardern hasn’t outlined a plan for reaching this goal, but has suggested creating an independent commission to aid in the transition to a lower carbon economy.
She also set a goal of doubling the number of trees the country plants per year to 100 million, a goal she says is “absolutely achievable” using land that is marginal for farming animals.
Greenpeace New Zealand climate and energy campaigner Amanda Larsson believes that phasing out fossil fuels should be a priority for the new prime minister. She says that in order to reach zero net emissions, Ardern “must prioritize closing down coal, putting a moratorium on new fossil fuel plants, building more wind infrastructure, and opening the playing field for household and community solar.”
A worldwide shift to renewable energy
Addressing climate change is becoming more of a priority around the world and many governments are assessing how they can reduce their reliance on fossil fuels and switch to environmentally-friendly energy sources. Sustainable energy is becoming an increasingly profitable industry, giving companies more of an incentive to invest.
Ardern isn’t alone in her climate concerns, as other prominent world leaders like Justin Trudeau and Emmanuel Macron have made renewable energy a focus of their campaigns. She isn’t the first to set ambitious goals, either. Sweden and Norway share New Zealand’s goal of net zero emissions by 2045 and 2030, respectively.
Scotland already sources more than half of its electricity from renewable sources and aims to fully transition by 2020, while France announced plans in September to stop fossil fuel production by 2040. This would make it the first country to do so, and the first to end the sale of gasoline and diesel vehicles.
Many parts of the world still rely heavily on coal, but if these countries are successful in phasing out fossil fuels and transitioning to renewable resources, it could serve as a turning point. As other world leaders see that switching to sustainable energy is possible – and profitable – it could be the start of a worldwide shift towards environmentally-friendly energy.
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