The UK Government should consult on making it mandatory for default funds in defined contribution schemes to align with the UK’s climate goals, lawmakers have suggested.
At present, 95% of workers who are automatically enrolled into a workplace pension remain in the default fund, with not every provider offering a dedicated ESG or green alternative. A report on pension scheme stewardship ahead of COP26, published today by the Work and Pensions Select Committee, an influential scrutiny body composed of MPs from all parties, recommended that the Government “consult on whether there is a case for mandating that these default options should align to UK Government climate goals.”
The report also found that greater regulatory clarity on the meaning of Net Zero is needed, recommending that The Pensions Regulator defines Net Zero alignment and develops guidance for schemes looking to set their own.
It also recommended that the UK should seek gr…