Lloyds, Aviva and BP pension schemes 'complacent' over risk to investments caused by climate change

Josh Mines
Climate Change And Global Pollution To Be Discussed At Copenhagen Summit
MPs have warned major UK pension schemes that they should be mitigating against the risk posed to investments by climate change (Source: Getty)

Major pension schemes including funds owned by Lloyds Bank, BP and Aviva are "complacent" over the risk that climate change could have on investments, MPs have today said.

The Environmental Audit Committee asked the UK's 25 largest pension funds whether climate change risk was incorporated into their investment decision-making.

The study showed that large funds including BP Pension Fund, Aviva Staff Pension Fund and Lloyds Bank Pension Scheme had not formally considered climate change as a strategic risk.

The Bank of England has warned that investments can be affected by climate change in a number of ways. Physical impacts such as flooding can pose economic risks to businesses and investments, while firms like BP and Shell can face liability trouble when communities recover damage in the wake of flooding.

Most of the 25 examples, including the funds of Barclays, HSBC and BT all said they were taking steps to minimise the risk of climate change to investments.

Mary Creagh, chair of the Environmental Audit Committee, said:

It is encouraging that a majority of the UK’s largest pension funds say they are taking steps to manage the risks that climate change poses to UK pension investments.

But a minority of funds appear worryingly complacent. Pension funds should at least assess the exposure of their assets to the physical, transition and liability risks from climate change that will materialise during savers’ lifetimes.

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