Firms urged to harness ‘hidden superpower’ of pensions

Campaigners are calling on firms to align their pensions with net zero after research found that cash and investments can undermine the efforts of even the most climate-conscious of companies.

According to breakthrough research published in a new report, The Carbon Bankroll, the carbon footprint generated by investments and cash held in banks can sometimes be a company’s largest source of carbon emissions.

Hidden impact

In 2021, for example, the emissions generated by Microsoft’s $130 billion held in cash and investments were comparable to the cumulative emissions generated by the manufacturing, transportation and use of every Microsoft product in the world. In 2020, Amazon’s $81 billion held in cash and investments generated more emissions than the energy used to power every Amazon facility around the world.

The authors suggest that, just as companies can work to decarbonise their operations and supply chains, they can also work to decarbonise their finances by moving their investments or pushing their bank to reduce their financing of fossil fuels.

“It is impossible to overstate just how important this analysis is,” prominent environmental campaigner Bill McKibben commented. “This team is uncovering the largest remaining source of huge and hidden carbon emissions in our economy. It’s the equivalent of the moment when physical scientists figured out the last big new source of carbon – the melting tundra. But in this case, armed with these figures, we can swiftly do something about it.”