Fossil fuel free pension saving is here!

 

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Important: With investments, your capital is at risk. Pensions can go down in value as well as up, so you could get back less than you invest.

Exclude the planet’s biggest polluters

Exclude the planet’s biggest polluters

Your money won't be invested in companies that own proven or probable reserves in coal, oil or gas.

Make more socially responsible investments

Make socially responsible investments

Persistent violators of the UN Global Compact - as well as tobacco and arms companies - are excluded from the fund.

Pay one fair annual management fee

Pay one fair annual management fee

You’ll pay an annual fee of 0.75%, and that's it. We'll take this from your pension automatically.

Exclude the planet’s biggest polluters

Exclude the planet’s biggest polluters

Your money won't be invested in companies that own proven or probable reserves in coal, oil or gas.

Make more socially responsible investments

Make socially responsible investments

Persistent violators of the UN Global Compact - as well as tobacco and arms companies - are excluded from the fund.

Pay one fair annual management fee

Pay one fair annual management fee

You’ll pay an annual fee of 0.75%, and that's it. We'll take this from your pension automatically.

Become a Fossil Fuel Free Plan investor

Sign up today

What is Fossil Fuel Free?

What is fossil fuel free investing?

The Fossil Fuel Free Plan is one of the UK’s first mainstream private pensions to completely exclude companies with proven or probable reserves in oil, gas or coal, tobacco companies, manufacturers of controversial weapons and persistent violators of the UN Global Compact, whilst also investing more of your money in companies that are aligned with the Paris agreement. It does this by passively tracking the FTSE All-World TPI Transition ex Fossil Fuel ex Tobacco ex Controversies index.

In plain English, what this means is that your investments will passively follow the market performance of a group of fossil fuel and tobacco free companies within the index, instead of your money manager actively buying and selling stocks in these companies. Find out more about passive and active investing.

This is a completely new index created specifically for PensionBee’s Fossil Fuel Free Plan. The index is part of a new Paris-aligned index series designed in collaboration with the Transition Pathway Initiative, FTSE Russell and the Church of England.

This is a completely new index created specifically for PensionBee’s Fossil Fuel Free Plan. The index is part of a new Paris-aligned index series designed in collaboration with the Transition Pathway Initiative, FTSE Russell and the Church of England.

How does a Paris-aligned index work?

A Paris-aligned index is a way of investing more of your money in companies who have adjusted their businesses in preparation for climate transition, and moving your money away from those companies that still have high carbon emissions or display poor management when it comes to climate governance.

The index uses data on how well prepared a business is to capture the benefits from the transition to a low carbon economy, such as increased exposure to the global green economy, and invests more in those companies.

What is Fossil Fuel Free investing?

FAQs

About Fossil Fuel Free investing


How is this a new way to invest?

This is the first mainstream personal pension of its type that enables you to passively invest but exclude whole sectors, such as fossil fuels and tobacco. As a private pension saver you would normally have to find a specialist responsible investment fund from an active manager to offer you this level of discretion over where your money is invested. That can often be very expensive, complex to understand and come with additional risks.

The Fossil Fuel Free Plan is a hybrid of traditional passive investing; it tracks an index, but with the type of stock-picking you can only usually get from a niche responsible investment provider. The mainstream passive investing world has historically shied away from offering a product of this type because they didn’t believe there was big enough demand for it.

It’s a new plan and a new approach. What are the risks?

All investing carries risk. This plan has 100% allocation to shares (equities) and global stock markets, which brings both risk and reward. Pensions are a long-term investment and so many savers take an approach that carbon-focused businesses will become ‘stranded assets’ as we climate transition. This means they believe that investing in oil or fossil fuels is a risk, since the business models of these companies have no future in the green economy.

The plan tracks an index that’s part of the FTSE Climate Transition series. The first index of this type was launched in early 2020 as part of a collaboration between the Transition Pathway Initiative (TPI) and The Church of England. Learn more about the index.

What does the plan invest in instead of fossil fuels companies?

The plan invests more in major international companies with a proven track record of adjusting their business model and operations to prepare for climate transition. Currently the plan invests in approximately 1400 companies. A snapshot of the top 20 holdings for the last month is below.

Name Weight
Microsoft 6.00%
Apple 4.95%
Amazon 3.88%
Alphabet (Google) 3.44%
Nvidia Corp 1.21%
Taiwan Semiconductor 1.15%
JP Morgan Chase 0.97%
Home Depot Inc 0.90%
UnitedHealth Group 0.89%
Toyota Motor 0.78%
Tesla Motors 0.74%
ASML Holding 0.71%
Samsung Electronic 0.69%
Bank of America 0.68%
Disney 0.67%
Nestle 0.66%
Mastercard 0.61%
Proctor & Gamble 0.58%
Adobe Inc 0.57%
Cisco Systems 0.57%

View the full list of holdings in the Fossil Fuel Free Plan.

What are the specific exclusions?

FTSE Russell and TPI, who worked together on the index, set the index screening criteria for the exclusions. Read more about those criteria.

Fossil fuels

International companies that own proven or probable reserves in oil, gas or coal are excluded from the fund. These are major international companies such as Shell, BP, Total, Chevron, ExxonMobil, Rio Tinto, Glencore, BHP Billiton, and ConocoPhillips, alongside many others. In fact, more than 235 fossil fuel companies are excluded. Companies that provide services to the fossil fuel industry, such as oil refining, equipment & services, pipelines and gas distribution are also excluded.

Tobacco companies

International companies involved in the manufacture of tobacco products are excluded, such as British American Tobacco, Philip Morris, Imperial Brands. More than 40 tobacco companies are excluded.

Others

Manufacturers of anti-personnel mines, cluster munitions and chemical and biological weapons are all excluded.

Perennial violators of the UN Global Compact are excluded. Read more about the UN Global Compact.

How does the cost compare to similar funds?

If you look at the world of responsible investing, usually these types of pension products are actively managed. Active management means that your money managers are picking stocks on a weekly or monthly basis, and this can be very expensive. The Fossil Fuel Free plan benefits from a more passive approach, by tracking the market performance of a select group of fossil fuel free companies within the index. In general, passive strategies are more cost-effective than actively managed fund strategies.

What if I want to exclude more sectors than this?

This new fund, like all our new product developments, came about as a result of customer demand. We are very grateful to our customers for speaking up and telling us that they wanted something new.

If our customers speak up again, en masse, and tell us that they want to exclude another sector from their pensions then we’ll survey our customers again. If we see demand for a new type of product then we’ll work with our money managers to create it. The power is in your hands!