The pension investments of major FTSE100 companies finance seven times more carbon than their UK company emissions, according to a new report by Richard Curtis’ climate finance campaign Make My Money Matter and Scottish Widows.

The research, conducted by sustainability research house Route2, suggests that major businesses’ efforts to operate more sustainably are being undermined by the investments within their company pension schemes.

In fact, the investments of FTSE100 pension schemes currently finance an estimated 131 million tonnes of unreported carbon to enter our atmosphere each year.

Poor awareness among leadership around the link between pensions and climate change is compounding the problem. Further research by Make My Money Matter shows that less than half (45%) of chief executive officers and business leaders know that their company pension scheme could be driving climate change, and that less than 10% of FTSE100 companies even mention pensions within their sustainability strategies.

The inaction is out of touch not only with the climate emergency, but also with the growing demands of staff who increasingly want their employers to offer more sustainable pensions, the report stated.

New research by Scottish Widows being released later this month shows that the majority (72%) of workers want their employer to invest their pension sustainably, while current job seekers also cite this as a top five employer priority alongside flexible working and attractive holiday packages.

As the effects of climate change are witnessed across the world, with record temperatures, crippling droughts and unprecedented flooding, businesses cannot afford to ignore one of the best carbon-cutting tools at their disposal – their company pension scheme.

Curtis said: “We hope this report acts as an urgent wake-up call and puts company pensions – and the billions invested by them each year – at the heart of all organisations’ sustainability strategies. Doing so will not only help companies tackle climate change, but also send a powerful signal to the pensions industry that it’s time we all made our money matter in the historic fight for our planet and the people who live on it.”

Church of England advises on how to invest in tech companies

The Church of England’s Ethical Investment Advisory Group (EIAG) published a report advising investors with Christian values how to approach investing in big technology companies.

The Church’s three National Investing Bodies (NIBs) – The Church Commissioners for England, The CBF Church of England Funds, and The Church of England Pensions Board – which received the advice, have published a new policy in line with this guidance, it was announced.

The report recommends technology companies make public commitments including:

  • a commitment to verifiable transparency;
  • a commitment to promote human-centred design;
  • a commitment to enable the flourishing of children and other vulnerable groups;
  • a commitment to foster a tech eco-system that serves the common good.

The Bishop of Manchester, David Walker, deputy chair of the EIAG, said: “This report addresses important issues about how technology influences our lives, including the most vulnerable among us. We recognise it can take years to fully understand how technology shapes how we work, play and interact with each other – only very recently has the full impact of technology become clear.”

He said that investors like the Church’s NIBs can play a role in working with technology companies to ensure they take a human-centred approach, giving users more control and being transparent about their working practices.

The NIBs’ new investment policy builds on their existing work engaging with technology companies. Issues the NIBs’ engagement address include data storage (location and environmental impact), human rights and artificial intelligence ethics, among others.

World Benchmarking Alliance launches coalition on ethical AI

The non-profit World Benchmarking Alliance (WBA) has launched the first multi-stakeholder coalition on ethical artificial intelligence (AI).

The Collective Impact Coalition already has 39 supporting members, which include lead investors Fidelity International, Boston Common Asset Management, and 29 financial institutions representing $6.3trn of assets under management.

This coalition aims to raise awareness of the importance of responsible and ethical AI, increase understanding of the state of play and leading best practices, and improve technology companies’ commitment to ethical AI.

While the benefits and potential of AI are recurrently publicised by digital companies, more work needs to be done in identifying and disclosing its risks, especially around privacy and human rights.

This issue was flagged by the WBA in its latest Digital Inclusion Benchmark, published in December 2021, after assessing and ranking 150 of the world’s most influential technology companies based on their commitments to advance a more inclusive digital society.

Out of the 150 companies, to date only 20 have disclosed their commitment to follow ethical AI principles.

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