Pension savers across the world are increasingly looking to invest their money in ways that help the climate. And, for those so inclined — whether as an employee with a workplace scheme or someone going it alone with a private pension — there are plenty of options available.

Since 2022, UK pension schemes with more than £1bn in assets under management have been legally required to consider and report on climate-related risks and opportunities. Each relevant scheme should have a climate report available on its website.

Katrina Brown, responsible investment director at UK wealth advisers Evelyn Partners, says: “While they are not the most exciting of reads, it is rapidly apparent which ones have really worked to understand the complex issues and which are just ‘talking the talk’.”

Some schemes seek publicly to use their influence with the companies in which they invest by encouraging them to reduce their carbon output. For example, last year, the Church of England endowment fund and pension scheme announced they were selling investments in 11 big oil and gas companies, after concluding that none were aligned with efforts to halt global warming.

Becky O’Connor, director of public affairs at PensionBee, a UK pension consolidation provider, adds that individual savers can choose the funds they put their pension contributions into.

“Although more than 95 per cent of people stay in their default pension plan, most workplace providers will also offer a responsible or ethical option,” she explains. “These funds allow people to invest in companies that align better with their environmental and social values, ranging from how a company treats the environment to its own employees, whether that’s in terms of paying a living wage or working standards.”

All told, the rapid rise of interest in environmental and other forms of ethical investment resulted in almost $3.1tn being placed in nearly 7,700 vehicles badged as sustainable funds by the end of the second quarter of this year, according to data supplied by Morningstar. The majority of these funds are based in Europe.

However, the once rapid growth in the money committed to such funds has slowed of late. This drop-off comes amid concerns over the exaggerated environmental claims, or “greenwashing”, of some vehicles, a political backlash in the US against ethical investing, and poor performance by some funds compared with their conventional rivals.

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