One in 20 (5 per cent) people plan to switch their pension or investments to an ethical or sustainable fund, according to research from Friends of the Earth.

This is despite the majority (60 per cent) of people believing that 2021 can be a positive year for building a greener future, and 45 per cent stating that they are now more mindful of the environment following the pandemic.

The climate charity emphasised that whilst the pandemic and other world events of 2020 have brought environmental issues into sharp focus for many, few people recognise the impact that switching their finances to greener suppliers can have.

Commenting on the findings, Friends of the Earth head of policy, Mike Childs, stated: “The rising environmental optimism and enthusiasm for greener lifestyles is highly encouraging.

“People have a powerful role to play in protecting our planet, whether it’s through individual or community action, or by urging our councils or the government to put green issues at the heart of their decision-making.”

Awareness of environmental concerns in pension investments is growing through the launch of consumer campaigns, such as Make My Money Matter, which have urged both members and the industry to 'urgently' address climate crisis.

However, industry research had suggested that more awareness is still needed, with Scottish Widows revealing that almost half (48 per cent) of savers stating that they are unaware that there are ways to ensure their pension is environmentally friendly.

This is despite research suggesting that the positive impact of investments could improve engagement, with further findings suggesting that members would be willing to increase their pension contributions if they thought it would be good for the environment

This has in turn prompted calls for action, with Good Energy urging The Pensions Regulator to take more drastic action after stating that the industry is "failing to act on the crisis", and the Association of Consulting Actuaries arguing that increasing member interest should be seen as a wake-up call for the "lagging" pensions industry.

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