Divesting Pensions [Better Money]

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We all pay into pensions throughout our working life. What has only been realised within the last three decades is the vital role pensions play in tackling the climate and ecological crisis. This is due to the trillions of pounds held in these pension pots that continue to fund companies that require vast capital sums to explore for natural resources. Although these types of investments can attract significant short term financial returns, they have devastating impacts on the environment as funds are used to explore for oil and gas that in turn fuel climate change.

Here you will learn how to divest your pension out of fossil fuels and other unethical investments. From moving personal pensions to setting a campaign we are here to help. Do seek further support from other organisations listed here through community recommendations which specialise in doing this work.

History of the divestment Movement

People have begun divestment movements across the world calling for their institutions, councils and even national governments to stop investing their pension pots in fossil fuels. The movements have been highly successful, resulting in massive institutions divesting trillions of dollars away from these industries. There is strong evidence to show that this is having an impact on shareholder decision making, the value of shares and the behaviour of these companies.

The complexity of divesting pensions

Pensions are highly complex, which has meant many institutions have chosen to make a divestment commitment over a period of time. This complexity is created by tiny proportions of investment portfolios invested in companies that support the fossil fuel industry in some form or another. It becomes a headache for investment managers to unpick their portfolios with a level of confidence to identify these institutions. And as there are not many completely green investment alternatives, it proves difficult to move large volumes of money in the right direction.

Although it is difficult to move pensions, it is only through continued pressure that more completely green funds will be created.

How to divest your own pension

The first step to divesting a pension is to request information about how it is being invested. You have the right as an individual or a member of an organisation to request this information and if you use freedom of information request, then you can get this information from any institution.

If you are part of a workplace pension scheme, then you cannot have your money separated from the rest of the contributors. This means you will have to collectively lobby for the pension fund to be divested. This requires for the initial information you have collected from your request to be analysed and a set of demands to be drawn up. A divestment movement may then be started amongst a group of colleagues.

Often pension schemes are made with companies which you have the right to move your pension away from. You can find ethical pension funds to move your pension fund into, sometimes with better returns, and without financial penalty for the transfer. Having a fund manager or investment specialist to help you with this process is recommended.

How to lobby an institution to divest its pension

You can lobby for any institution you are associated with to divest its pension. This could be the local council or even national government, but where possible it’s best to choose an organisation closer to home, like your local school or university, where you are acquainted with the community. As with a personal pension, you can use a freedom of information request to have that institution provide you with details of how their pension is invested. From this point, you will need to draw together a list of demands.

Publicity and community support for such a divestment effort is needed to achieve a positive outcome. This can be achieved by utilizing knowledge of the pension pot’s full value and by starting a petition and holding public demonstrations to demand funds be divested. These efforts can then result in a meeting with the institution to understand their position and what they think is achievable, with both parties settling on an agreed method of moving forward.

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