The UK’s largest pension company will call on the government to discuss legislative backing for clean energy investment later this year.
The University Superannuation Scheme’s (USS) co-head of responsible investment, David Russell, confirmed to DeSmog UK that it will be, through the Institutional Investors’ Group on Climate Change, “pursuing a meeting with new ministers after the summer recess to discuss legislative backing for clean energy investment.”
USS’s push for a more clean energy investment-friendly policy environment falls within its remit of “delivering the best retirement savings solutions for employers and members,” Russell added.
The news comes a year after the pension company and others met with the now former Energy and Climate Change minister Andrea Leadsom following the government’s drop in support for onshore wind, solar power, and energy efficiency.
USS, which has £50 billion of assets invested in a range of company shares, bonds and private markets, recognises the risk climate change poses to those investments and thus the risk to their members’ pensions.
The meeting with the Department for Energy and Climate Change (DECC) last year saw USS “underline their interest in clean energy investment that contributed to longer-term decarbonisation” and was part of their wider efforts to ensure a legislative environment that makes clean energy investment easy.
Referencing the meeting this past May, USS’s Russell was critical of the government’s approach to clean energy investors, saying “we did make it clear to them that the signals they were sending the market were not positive if they wanted more investment in the space.”
With DECC now dissolved into a new department, Russell said: “We hope that the new Department for Business, Energy and Industrial Strategy continues the work started by DECC to implement the fifth carbon budget and the commitments the UK made in advance of COP21.”
The fifth carbon budget, which places a restriction on the total amount of greenhouse gases the UK will require 57 percent cuts in emissions by 2032. The UKs commitment to the Paris Agreement will require further strengthening of these carbon budgets.
Yet government policy towards clean energy has not reflected the need for such large emissions cuts. In addition to the dropping of support for onshore wind, solar and energy efficiency, Professor of Energy and Climate Change Kevin Anderson recently outlined how any fracked gas in the UK would be incompatible with the UK’s commitment under the Paris Agreement.
Greening all financial flows is imperative to tackling climate change. In a speech to the United Nations General Assembly in April, the Governor of the Bank of England Mark Carney said that decarbonisation of the economy “implies a sweeping reallocation of resources”.
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