The government has been urged to "play its part" in addressing climate change problems via the pensions industry, with industry experts emphasising the importance of a holistic approach.

Speaking at the Pensions and Lifetime Savings Association (PLSA) Annual Conference 2020, former Pensions Minister and Lane Clark and Peacock (LCP) partner, Steve Webb, argued that the industry must not “let the government off the hook”.

He stressed that the government had frozen petrol taxes for the last decade, stating that if the government wants the pensions industry to fix climate change, it must first sort out its own house.

He stated: “The government can’t subcontract this vital task to others when it isn’t doing the things it needs to do.

"Pension funds are crying out for long term secure index linked investments, which ought to be a perfect fit with infrastructure and long-term, but where are the things to invest in – where is government making these things at a level of risk pension schemes are willing to take on?

“The pensions industry can make a difference, but government has to play its part and all too often doesn’t.”

Adding to this, Webb highlighted The Pension Regulator’s (TPR) recent consultation on the defined benefit (DB) funding code, noting that whilst the gist of this is “prudence” and “caution” this could have unexpected results for pension investments.

In particular, he explained that this would see pension funds moving away from long-term strategy, in favour of less equity, and increased government bonds.

Webb continued: "I was always aware as a Pensions Minister, that one day I do state pension, the next auto-enrolment, the next climate change, but all these things tie together.

"Has anyone said to TPR, if you force these billions of pounds into ultra-conservative, ultra-low risk investments, what does that do for the climate?”

"Does pension policy think about these things, or does it think about them in silos? I fear it does."

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