Do you want to finance climate change? No? I thought not….

By Dave Sanderson

Do you want part of your pension pot to be invested in shares that are likely to decline in value? Once again, I imagine you will say no, of course not….

Yet you are probably doing both these things without even realising it! Let me explain.

Most of us who are working have some sort of pension fund, however small. Virtually all of us have a bank account. Some have a stocks and shares ISA. In every case, the finance organisation that manages your account invests that money in businesses that they think will do well, so as to make a profit for you or them. In many cases, the finance house puts much of it into the shares of the biggest firms, such as those in the FTSE 250 index. You do not usually have any control over which businesses benefit from your funds.

BP, Centrica (British Gas), Drax and Shell are all in that shares index. So your pension pot may well be partly invested in them, so enabling them to find, produce, market or burn fossil fuels and so directly contribute to global warming. It’s time to align your investments with your values!

An increasing number of big organisations and prominent individuals are now pulling their money out of businesses that produce fossil fuels, especially coal and oil as they are the worst polluters. For example, the Norwegian Sovereign Wealth Fund (one of the biggest in the world), the British Medical Association, the World Council of Churches, the city of Bristol and the University of Oxford. This is a global trend, being led by the USA.

As an ever growing number of organisations divest, then the fossil fuel businesses become stigmatised and the value of their stocks are less likely to hold up and should eventually decline. And who wants their money invested in stocks that are at risk of losing value or are actually doing so?

That’s two good reasons to try to get your money out of fossil fuel businesses. But doing so isn’t easy unless you personally directly hold shares in such firms, in which case you can just sell them. But what if, like me, your money is in a fund that tracks the FTSE? You can write to the chief executive of the finance company (get their name and e-mail from this website) asking them to move your money; they probably won’t but if enough people ask they may introduce fossil fuel free funds. You could move your money to a more ethical finance house, such as the Co-op Bank or insist your financial adviser does it for you. Here is an American one, just to show they are emerging.

There’s lots of material on the web about divesting from fossil fuels. The very good blog Make Wealth History covers this, for example

In terms of practical action, the UK based Go Fossil Free UK lists actions you can take.

So what are you waiting for?


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