Investing in nature is a revelation for members. Their questions include: Am I helping or hindering? How do you measure it? Is it near me?
We spoke to 50 pension scheme members across the UK, in a series of focus groups and one-to-one conversations. We were planning to speak to them about their pension and climate change – to test our TCFD member summary with them. But conversations about pensions and climate quickly turned to nature. And it turned out these members had a lot of thoughts, and questions, about that.
Here’s what members want to know.
1. Does my pension have an impact on nature?
Not many people know their pension money is even invested (only 36% of people according to Hargreaves Lansdown), let alone that it’s investing in the real world. So when these members found out their pension is investing in companies that have an impact on nature, and could even be directly investing in nature, it was a real revelation.
“What’s the most interesting thing I’ve learnt from this? Just the fact that my investments are impacting nature at all. I had no idea.”
“I have a soft spot for nature, so I’d like to know.”
We gave members examples to show not just how their investments might be impacting nature, but also how their investments might depend on, and so be affected by nature.
“I’d never thought about how pension savings could impact nature. Ever. It’s so interesting. And that my investments could be affected by nature as well – like a company I invest in getting flooded.”
2. Is it good or bad?
Once members had got over the shock that their pension had an impact on nature, their next question was simple: good or bad?
“I want to know the impact of my investments on nature, the activities my investment is enabling: is it positive or negative? Am I building or am I destroying the green earth?”
“Is my pension damaging nature or is it protecting it?”
3. What does it look like?
The best way to make pension money interesting is to make it tangible, something we explore in our ultimate guide to responsible investment communication. So it’s not surprising then that members immediately asked for more examples of what their money was doing. They were particularly interested in examples of direct investment in nature. And they all gravitated towards different examples based on which parts of the natural world they cared about most.
“I didn’t know you could restore and regenerate a forest and get a return on it. Deforestation is really wrong, and it’s happening all over. So this type of investment is really important. The image of a forest being regrown just stays in my mind.”
“We’re seeing numbers of animals dwindling, and we hear about it all the time. So anything you do to protect endangered species or improve their living habitat is beneficial. If you really could invest in that – that would be worthwhile doing.”
4. Is it near me?
‘Where?’ was the next question. And it turns out, the closer, the better. Members wanted more investment in their local natural areas.
“That investment’s the most interesting, the one in Scotland, because that’s home.”
“This one’s local – that’s really good to see.”
5. How do you measure it?
The industry has been grappling with the complexity of measuring nature – what does one unit of biodiversity improvement look like? So it was heartening that some members understood the challenge.
“I’d like to know more about the impact, but I’m not sure how you’d do that or how you’d measure that. For example, acres of hectares of forestry replanted? That would be good to see.”
It’s an opportunity for engagement
Talking to members about what their money is doing isn’t a silver bullet for engagement. But, to mix metaphors, it is a useful tool in the engagement shed. And nature might be the sharp end of that tool – with members saying they found investing in nature even more exciting than investing in clean energy, or other companies that tackle climate change. For some this was because of their ‘soft spot’ for nature. For others it was because nature felt even more tangible and real than climate.
What was universal though, was the feel-good connection:
“I would feel better if my investments were helping to protect nature. I’m actually looking forward to seeing my annual report now… I hope it tells me what my pension’s impact on nature is.”
Helping people feel good about their pension is one of the most powerful ways you can help them engage with it, and take ownership of it.
