Glasgow, Scotland — host city of COP26
Over 160,000 pension scheme members will take part in a COP26-initiated three-week trial where they will be encouraged to make greener pension choices.
The ‘green nudge' trials - commissioned by the government in its COP26 agenda - will test the impact of nudges and messages against increasing saver engagement with the sustainability of pension investments.
Correlation will then be drawn between the findings and a translation into greener decision-making.
The Department for Work and Pensions (DWP) is working with the Behavioural Insights Team - the ‘nudge unit' team that was once part of the Cabinet Office - on the project, as well as with Aviva, Smart Pension, and Hargreaves Lansdown.
Scheme members will be encouraged to invest in more sustainable pensions through the nudges from the providers and to learn more about the sustainability of their pensions.
Pensions and financial inclusion minister Guy Opperman said the trails would "give vital insight" into how successful or otherwise intervention measures can be.
"I look forward to seeing the results," he said. "Through the productive long-term investment power of pensions, we can help the UK get to net zero and deliver both investment returns and a sustainable planet."
Aviva director of workplace savings and retirement Emma Douglas said increasing engagement was a key priority.
"We are pleased to partner with the DWP on this trial, particularly because it focuses on two incredibly important issues. Increasing engagement with pension saving is a top priority for our clients and for Aviva, and this trial will consider whether customer messaging around climate change can prompt people to engage more."
Douglas, who is also chair of the Pensions and Lifetime Savings Association, added: "Of equal importance is educating savers about the role their pension scheme investments can have in achieving net-zero ambitions, and this trial will do that too. It is a real win-win opportunity for providers, consumers and ultimately, climate change."
Hargreaves Lansdown senior analyst Nathan Long said there were already clear examples of nudges helping increase saver engagement and decision-making.
"This important work comes at a time when increasing numbers of people are looking to use their investment and pensions for good but need more help to do so," he added. "We are also interest to see to what extent the lo levels of understanding of how pensions invested acts as a barrier."
