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Politicians are worried that their pensions are destroying the planet. Is yours?

How climate change spells pension pain.

I’ve got a pension, you’ve got a pension, we will all soon have a pension. And for many of us in Generation Y, simply knowing that it exists (somewhere, if only I can find the login) is about as much involvement as we have. But it may be time for such a hands-off attitude to take early retirement.

The threat that climate change poses to the price of oil and gas stocks could hit pension investments hard. Even the Governor of the Bank of England, Mark Carney is concerned.

So how exactly do you protect your end-of-career payout from an end-of-days slump?

Thankfully, our politicians are showing the way. Together with 350.org, over 35 MPs and former MPs have launched a campaign to demand greater transparency within their own £589m pension fund.

For Caroline Lucas, who has been championing the issue since 2014, “climate Change is the defining issue of our time”, and the Divest Parliament campaign is “a great opportunity for MPs to lead the way” towards more socially responsible investment.

The hope is that that fund’s trustees will be encouraged to take the financial risks of climate change seriously, to disclose the fund’s exposure to carbon-intensive industries, and commit to phasing out fossil fuel investments. Thus protecting not just the planet but pockets too.

Laura Sandys, the former Conservative MP, says, “climate change represents a serious financial risk to pension savers and investors across the UK”. While Barry Gardiner, Labour’s shadow international trade secretary and shadow energy minister, is concerned that the MPs' current fund is “taking stupid risks with public money”.

So far, according to the Divest Parliament campaign website, the response from the trustees has been far from promising. After an Early Day Motion on the specific subject, the trustees announced that climate change “may” pose a financial risk to the fund. But when pressed for more information, they released a letter stating it was no longer possible “to engage in further prolonged discussion” on the scheme’s investment approach.

The lack of transparency at the highest levels of government may seem shocking. But it shouldn’t. According to Grace Hetherington from the charity ShareAction, such opacity is nothing new: “The response the MPs had was particularly poor – but it is surprisingly standard to have difficulty finding out what your pension is in.”

So if MPs can’t get the inside story on their investments, what hope is there for the rest of us? Here are five things to know about protecting your pension from petroleum implosion:

Should you be worried about your pension’s exposure to fossil fuels?

Yes. Most pensions are invested through something called “Defined Contribution Schemes”, in which how much you get at the end is entirely dependent on how well your investments do. This means savers bear all the risk if their investments take a tumble.

What’s the worst-case scenario?

It is almost impossible to calculate the rate at which societies around the world will make the transition to a clean or low-carbon energy mix. However, according to this seminal 2013 report from the Carbon Tracker initiative, markets have failed to fully address this trend. As a result, the oil and gas stocks could face “a $6tn carbon bubble in the next decade”.

How come pension funds are not already responding themselves?

Most pensions involve long chains between the saver and the money. Many pensions are set up by employers, who in turn choose a pension fund to invest the money. These funds often outsource to investment consultants and asset managers, who then choose which shares to go with.

Unfortunately, not all pension trustees are signed up to the ethical – or financial – risks posed by climate change. In fact, 53 per cent, according to a recent survey by Professional Pensions, do not see the issue as a “financially material risk” to their portfolios.

What needs to change?

ShareAction, who promote responsible investment by institutional investors, think that we need to see closer alignment between the interests of savers and the actions of pension funds. Just as Theresa May has said she would like to see worker representation on company boards (though this won't be mandatory), so too might the government encourage funds to better represent their savers.

What are the signs of hope?

Thankfully, it is not just the MPs who have decided it is time to take action.

This summer, NEST, the government’s workplace pension scheme, published its first responsible investment report on its website. Scottish Widows, after pressure from a team of savers, are launching a “climate audit” to measure their risk to carbon stock. And across the country, many smaller funds – from West Yorkshire to Transport for London – are already inviting savers to attend annual members meetings.

Waltham Forest has even become the first local government pension fund in the UK to entirely commit to divest from fossil fuels. Perhaps its now time for more to come out of the woods.

India Bourke is an environment writer and editorial assistant at the New Statesman.

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PMQs review: Jeremy Corbyn prompts Tory outrage as he blames Grenfell Tower fire on austerity

To Conservative cries of "shame on you!", the Labour leader warned that "we all pay a price in public safety" for spending cuts.

A fortnight after the Grenfell Tower fire erupted, the tragedy continues to cast a shadow over British politics. Rather than probing Theresa May on the DUP deal, Jeremy Corbyn asked a series of forensic questions on the incident, in which at least 79 people are confirmed to have died.

In the first PMQs of the new parliament, May revealed that the number of buildings that had failed fire safety tests had risen to 120 (a 100 per cent failure rate) and that the cladding used on Grenfell Tower was "non-compliant" with building regulations (Corbyn had asked whether it was "legal").

After several factual questions, the Labour leader rose to his political argument. To cries of "shame on you!" from Tory MPs, he warned that local authority cuts of 40 per cent meant "we all pay a price in public safety". Corbyn added: “What the tragedy of Grenfell Tower has exposed is the disastrous effects of austerity. The disregard for working-class communities, the terrible consequences of deregulation and cutting corners." Corbyn noted that 11,000 firefighters had been cut and that the public sector pay cap (which Labour has tabled a Queen's Speech amendment against) was hindering recruitment. "This disaster must be a wake-up call," he concluded.

But May, who fared better than many expected, had a ready retort. "The cladding of tower blocks did not start under this government, it did not start under the previous coalition governments, the cladding of tower blocks began under the Blair government," she said. “In 2005 it was a Labour government that introduced the regulatory reform fire safety order which changed the requirements to inspect a building on fire safety from the local fire authority to a 'responsible person'." In this regard, however, Corbyn's lack of frontbench experience is a virtue – no action by the last Labour government can be pinned on him. 

Whether or not the Conservatives accept the link between Grenfell and austerity, their reluctance to defend continued cuts shows an awareness of how politically vulnerable they have become (No10 has announced that the public sector pay cap is under review).

Though Tory MP Philip Davies accused May of having an "aversion" to policies "that might be popular with the public" (he demanded the abolition of the 0.7 per cent foreign aid target), there was little dissent from the backbenches – reflecting the new consensus that the Prime Minister is safe (in the absence of an attractive alternative).

And May, whose jokes sometimes fall painfully flat, was able to accuse Corbyn of saying "one thing to the many and another thing to the few" in reference to his alleged Trident comments to Glastonbury festival founder Michael Eavis. But the Labour leader, no longer looking fearfully over his shoulder, displayed his increased authority today. Though the Conservatives may jeer him, the lingering fear in Tory minds is that they and the country are on divergent paths. 

George Eaton is political editor of the New Statesman.

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