A sustainable pension – can I have a cookie and at the same time eat it?

A recent report from “The Institute and Faculty of Actuaries” show that many investors ignore future resource constraints, driven by climate change!

BOHICA-Wide

Do you want this man to be responsible for your pension-funds?

A comprehensive look at what global investors are thinking, found out that while there is no question that resources will be squeezed in the future, asset managers did not consider this in their decision-making process.

Resource Constraints

Click picture, to read full article and download pdf-reports

Resource constraints: sharing a finite world

“Currently, actuarial models are effectively discounting to zero the probability of economic growth being limited by resource constraints”.

“The most extreme scenarios modelled represent financial disaster; the assets of pension schemes will effectively be wiped out and pensions will be reduced to negligible levels,”. And this extreme scenario is based on business-as-usual and things continuing just as they are now.

“At best these constraints will lead to an increase in energy and commodity prices, and at works create an uncertain and unstable economy”.

Swedish basic pension

Recently one of Sweden’s major pension-funds, AP4, declared that they were divesting from 150 businesses with major CO2-emissions – sounds sustainable! After some background check it turned out that this “Sustainable” announcement only was valid for a 1.5% share of the total 210 Billion SEK in the fund – now it sounds more “green-wash”…

When looking at all the Swedish AP-funds (1-7) together, they have assets in the region of 1,012 Billion SEK and have investments in at least 6 of the largest fossil-fuel companies and also a series of companies blacklisted by other investors, and companies usually classified as very environmentally destructive.

In an interview, Christina Kusoffsky Hillesöy, chairman of the AP funds’ Ethical Council, explains their view.

“- We believe that it is more responsible to remain as owner and use dialogue rather than exclude companies from our portfolio. If we exclude a company that behaves badly, we are of with the problem, but it is left in the company. We want to try to influence by putting pressure on management and the board”

A reflection from an “upcoming pensionist”:

Isn’t that a bit naive? What is the likelihood that the largest privately owned companies like Exxon, with revenues almost equal to the GDP of Sweden should listen to a tiny shareholder i.e. the AP-funds? And what should they do – stop their “Fossil-fuel-business” altogether? How would that effect the investment?

I have always believed that a pension-fund is there to provide for me in the future when I retire. How can a pension fund at the same time finance a business that is the main contributor to the climate-change, which is depriving me from having a future?

FossilFree

Isn’t the more obvious and ethical choice to start to divest from the fossil-fuel companies and at the same time urge others to do so – thereby starting the journey to a better and “possible” future – and a livable planet.

“Go Fossil Free!”

Join the movement at: www.gofossilfree.org/

 

Ageing population

 

A global perspective.

Is it possible that many of the  pension-funds around the world own portfolios with major investments in the fossil-fuel business?
All scientists agree that we need to stop adding more CO2 to the atmosphere (stop burning fossil-fuels) if we want to keep a livable planet!

What will happen when these two interests collide and the “fossile-fuel-bubble” bursts?

It is time to start restructure of portfolios in favour for humanity!