The government must address climate change by passing a law requiring auto-enrolment (AE) default pension funds to achieve net-zero carbon emissions status by 2050, according to Aviva.

The pension provider said the Pension Schemes Bill, which currently would only require pension funds to disclose how they will assess and report their climate change exposure, should be amended to include the requirement.

It added that these requirements for pension schemes would aid the government in meeting its own net-zero emissions goals by this century’s midpoint.

Aviva indicated that doing so would also be in the interest of savers, with the company’s own research having found that more than half (59 per cent) of savers thought it was important that pension funds ensure their investments help to tackle climate change.

A similar amount (56 per cent) agreed that the government should require default pension funds to achieve net-zero carbon emissions by 2050, with this figure rising to two-thirds (66 per cent) among millennials.

Younger savers were particularly passionate about the issue, with more than three-quarters (77 per cent) of those due to retire in the 2050s are concerned about climate change, with 35 per cent categorising themselves as ‘extremely concerned’.

Four in ten (43 per cent) Millennials were aware of how their pension savings could significantly impact issues, such as climate change, while 57 per cent were aware of environmental, social and governance investing.

Aviva announced it has committed to a target of net-zero carbon emissions from its auto-enrolment default pension funds by 2050 and is exploring the possibility of achieving the aim by 2030.

The provider intends to work towards its goal by investing over £5bn into low-carbon equities and climate transition strategies across its default funds over the next 18 months, and has stated that it will subsequently look to increase the level of investment.

Aviva CEO of savings and retirement, Lindsey Rix, said: “The vast majority of savers are invested in a default fund – a fund which may take little account of climate change. The government’s requirements for schemes to report on their exposure to climate change is a positive move, but we have a responsibility to go even further for our customers and the next generation of pensioners.”

Make My Money Matter co-founder, Richard Curtis, commented: “With two of the UK’s leading pension funds now committed to net zero, that’s 13 million pension pots tackling the climate emergency. However, there’s much more to do. That’s why Make My Money Matter is calling for all pension funds to match Aviva’s leadership and commit to net zero, with a halving of emissions by 2030.”

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