Students are fed-up with the risk that Mum and Dad’s pensions will mess up their future. Now, they’re doing something about it, Charlotte Adlung reports.

The European Commission has ditched its framework aimed at setting binding and mandatory targets for achieving renewable energy across Europe. The major green lobbies are aghast at the commissioners, with Friends of the Earth describing the EU climate change commissioner as “burned out”. A good pun, if it’s intended. The climate change debate is most audible in the political sphere, with policymakers being cajoled and/or vilified when it comes to this issue. Closer to home, a group of Oxford University students have set up a campaign group: Push Your Parents.

It was in the Turf Tavern public house that Push Your Parent came into being. Theirs is a new strategy – challenge pension funds to face up to their responsibility as powerful investors. The group is calling for increased shareholder activism, and its frontline is manned by Mum and Dad.

The objective is to protect pension fund members’ retirement savings from the risks posed by climate change. Environmental, social and governance issues are at the heart of their five-pronged campaign. It calls on pension funds to assess the risks of climate change for their investments and the value of the pension and reduce their exposure to the “carbon bubble” by getting companies they are invested in to put an end to new or risky fossil fuel projects. It asks pension funds to increase investments in low-carbon assets, stop companies they are invested in from lobbying to block government action on climate change and, finally, that pension funds “work with the Asset Owners Disclosure Project to improve their performance on climate change-related risks and opportunities”. Repudiation by pension funds of investment in ‘risky’ fossil fuel projects such as tar sands and coal and an endorsement of low-carbon assets such as renewable energy and alternative propulsion technology are crucial ‘asks’ for their campaign.

With a mix of philosophy, science, finance and poetry, the Push Your Parents clarion call is less a cacophony, more a fine-tuned approach to ideal investment strategy. Critical to this is systemic risk stalking pension funds.

Raj Thamotheram, president of the Network for Sustainable Financial Markets and co-founder of the Institutional Investor Group on Climate Change, says: “Changes within the corporate sector often come about through consumer pressure. Change could happen in the same way with investors, and investors have a huge influence over companies. The obsession with the share price can destroy companies, and that is the system we have at the moment.”

But who’s in charge of bringing about change? If climate change were caused by gay sex or the practice of eating kittens, millions of protestors would be massing the streets, according to Daniel Gilbert, a social psychologist at Harvard, and quoted by Dominic Rosser, a research fellow at the Oxford Martin School’s programme on human rights for future generations. The human brain and the problem-solving skills acquired over the past 100 years, he says, equip us very badly to deal with climate change.

“Something must be done,” he says. “But the question is – by whom? Governments can’t do, won’t do and don’t do everything. I am therefore called upon to act. If you do not make governments act, they won’t act, and so one goal is to embed the push for government action in a shared mindset based on private action.”

Are pension funds on a proverbial wild goose-chase? And how much more exploration for, and investment in, fossil fuel can the world take? Not much, according to Myles Allen, professor of Geosystem Science, leader of Oxford University’s ECI climate-change research programme and lead author on the Inter-governmental Panel on Climate Change (IPCC).

“Pension funds investing in fossil fuel exploration could be wasting their money if it turns out we can’t afford to burn the fuels they find,” he says. “Known fossil carbon reserves are already more than adequate to cause substantial, potentially dangerous, climate change. Why are we pouring billions into hunting for more?”

The issue of responsible investment and sustainability is one the group believes should apply to all pension funds. Targeting specific pension funds, and so a divide-and-rule tactic, would not work since the moment one fund is persuaded to relinquish its place in the fossil fuel sector, another will simply take its place and carry on as normal. The army of Mum and Dad could perhaps assume as a de facto general the Price of Wales, who during the last NAPF annual conference suggested “a case for ensuring [pension funds’] portfolios are resilient in the long term…by incorporating sustainability into [their] mainstream strategy rather than having it sit in a subordinate silo”.

The subordinate silo may sooner or later be elevated to a higher plane, if and when the Push Your Parent campaign succeeds. The launch was met with enthusiasm by those in attendance, described by one as a “fantastic campaign with clear demands and a lot of energy behind it, with a good balance between positive and protest action”.

Thamotheram admits that the campaign’s ‘asks’ are not entirely doable. However, they “would actually improve the standards of enterprise risk and business continuity management in the UK pension sector. The markets are already speaking, and we can see valuations dropping dramatically. Analysts are downgrading coal companies – they’re factoring in the Black Swan, future price risk. You cannot stock-pick your way out of climate change, and that is why we have to engage ourselves with systemic solutions.”

The Push Your Parents campaign has a huge task on its hands. Systemic change is near impossible to bring about quickly. Detractors and sceptics will continue to argue against climate change. Investors will continue to chase dividends, including by – most likely – fracking about with the next big source of energy.

For Push Your Parents, pension funds are the key to their and future generations’ survival. They’re fed-up with the risk that Mum and Dad’s pensions will mess up their future. So be warned, an email from Mum and Dad will be winding its way to a pension scheme near you.