UK pension funds have an estimated £128 billion invested in fossil fuels, equivalent to nearly £2,000 for every person in the UK, according to new research by Friends of the Earth released today.

This is the key finding from “Polluted Pensions? Clearing the air around UK pensions and fossil fuels”, a new report [1] by Friends of the Earth England Wales and Northern Ireland, Friends of the Earth Scotland and Platform published just days before the start of COP26. 

The report investigated the investments of six of the UK’s largest pension funds and found a typical investment in fossil fuels to be 4.3% – when applied to the whole pension sector this amounts to £128 billion, £1,916 per UK citizen.

Earlier this year, the IEA stated that there should be no new investment in fossil fuel infrastructure if the Paris climate goals were to be reached. Pension investment in fossil fuels undermines UK and UN efforts to rapidly phase out fossil fuel use and presents significant financial risks [2]. Despite this, the report found that none of the UK’s largest pension funds were found to have credible plans to divest from fossil fuels.

Rianna Gargiulo, Friends of the Earth (England, Wales and Northern Ireland):

“With mere days until the UK hosts the UN Climate Change Conference and at a time when public concern about climate change is consistently growing, this report shows that pension funds are desperately lagging behind on climate action. Beyond that, pension funds are also playing fast and loose with workers’ hard-earned contributions by continuing to invest them in an industry in decline. 

“Anyone shocked to hear that their pension may be heavily invested in fossil fuel polluters should write to their pension fund, ask about its investments in the industry and call on it to divest.”

The report also reviewed the reporting of 27 of the UK’s largest pension funds and schemes and found that half published no information about their investments, including Now Pensions, with 1.8 million members, and the BT Pension Scheme, valued at £57 billion. Only 7 of the 27 funds published detailed information about their investments.

A recent review by the Work and Pensions Select Committee [3] concluded that the UK Government should use COP26 to encourage other countries to follow the UK’s lead on climate and pensions, but today’s new data suggests the UK pensions industry makes a poor role model.

None of the UK’s largest funds are currently committed to divestment. However, 150 funds globally have made divestment plans, Including the London Borough of Islington, which was commended in the report for having detailed plans to divest from fossil fuels and invest in green projects. Other UK pension funds were also commended for having clear divestment policies: the London Borough of Lambeth, Cardiff, and the Welsh Parliament. All pension funds were encouraged to follow their example.

The London Borough of Islington Pension Fund, valued at £1.4 billion in 2021 with 21,000 members, is highlighted as a successful example of fossil fuel divestment. It has implemented a number of initiatives to address the climate crisis including committing to divestment of all fossil fuels by 2022. Since 2016, the climate emissions from Islington’s investments have reduced by 69%.

Sussan Rassoulie, a member of Islington Pension Fund and fossil free supporter reacted:

“I have been a member of Islington Council pension scheme since 2016. As a scheme member it is very important to me that my pension contributions are not invested in companies which are involved in unethical practices such as human right abuses, breaches of international law and of course fossil fuel companies that threaten the entire base of our existence.

“My experience of reaching out to Islington Council on their fossil fuel investment has been by and large very positive, the pension committee seemed to be genuinely and consistently engaged with this issue and they came up with a clear, meaningful and time bound statement about their intention to divest, a commitment that seems to be borne out by their actions.”

The report urges pension funds and schemes to develop and publish fossil fuel divestment policies, increase the transparency of their investments, and employ fund managers and consultants that recognise the need for divestment and minimum standards on climate.

The report’s conclusions for the UK pension sector are based on a detailed investigation of the investments of six of the UK’s largest pension funds and schemes which found that typically 4.3% was invested in fossil fuel companies. The full methodology is detailed in ‘Sources’ in the preview of the report.

Other pension fund members commented as follows.

Paul Kinnersley, USS member and co-ordinator of the Divest USS campaign:

“USS has always been transparent about how it invests members’ pension contributions. However this transparency shows continued heavy investment in fossil fuels. The Vice Chancellors of 85 UK universities have divested their own funds from fossil fuels but continue to fuel climate change with their staff pension contributions. USS has committed to ’net zero’ by 2050 but has not produced a clear plan with milestones of how this will be achieved. Urgent action is needed now from one of the UK’s biggest pension schemes.”

Elaine Docherty, NEST member and fossil free campaigner in Glasgow:

“Attending AGMs of polluters with conscience-easing motions to meet Paris Agreement goals isn’t enough; if they can grow investors’ money more ethically why do NEST not have a funds-wide moral stance? If they refuse to divest, employers should have a corporate social responsibility to staff members auto-enrolled in this scheme – and to humanity and society – and should be pushing for divestment away from fossil fuels as a default.”


[1] The report can be downloaded at: https://foe.scot/resource/polluted-pensions-clearing-the-air-around-uk-pensions-and-fossil-fuels/ 

[2] A 2021 study by Carbon Tracker found that globally, investors have lost US $123 billion by betting on fossil fuel stocks in the last ten years while renewable energy investments gained US $77 billion: https://carbontracker.org/reports/a-tale-of-two-share-issues/ 

[3] Government must seize COP26 opportunity to build consensus on role of pension schemes in tackling climate change, MPs say https://committees.parliament.uk/committee/164/work-and-pensions-committee/news/157820/government-must-seize-cop26-opportunity-to-build-consensus-on-role-of-pension-schemes-in-tackling-climate-change-mps-say/ 

[4] “Polluted Pensions? Clearing the air around UK pensions and fossil fuels” is published jointly by: 

* Platform is a UK-based environmental and social justice collective with campaigns focused on the global oil industry, fossil fuel finance, and building capacity toward climate justice and energy democracy. www.platformlondon.org

* Friends of the Earth (England, Wales and Northern Ireland) is part of an international community dedicated to protecting the natural world and the wellbeing of everyone in it. We lead campaigns, provide resources and information, and drive real solutions to the environmental problems facing us all. www.friendsoftheearth.uk

* Friends of the Earth Scotland: Scotland’s leading environmental campaigning organisation with a network of thousands of supporters and active local groups across Scotland. We are part of the largest grassroots environmental network in the world, uniting 75 national member groups worldwide. www.foe.scot