It is a pleasure to follow the hon. Member for Cardiff North (Anna McMorrin), and it is good to see so many great contributions from hon. and right hon. Members from across the House. Pensions are a life asset—something that we build up over decades—and getting the policies right and working across parties is vital, so it is fantastic to see such unity and cross-party working on many of the issues contained within the Bill.
As my hon. Friend the Minister has said, the Bill makes our pensions safer, better and greener. I will focus my contribution today on that final point: pension policy becoming greener. Tackling climate change and getting to net zero is undoubtedly one of the country’s biggest challenges, and it is a top priority for me. The clock is ticking, and we all need to take action, from big corporates right down to the actions we take as individuals.
In September, I was delighted to welcome the Pensions Minister to Haworth in my constituency to visit Airedale Springs, a fantastic local manufacturing business in the Worth valley. It supplies mechanical springs to UK manufacturers such as Brompton Bikes. Crucially, it is innovative, and a green business, too. The roof of its factory has more than 100 solar panels, helping to supply its energy needs and power the business, and I want to see firms across our country adopting those kinds of innovative practices.
Our pension funds have trillions of pounds invested in assets under management, and that pension power can help us work towards achieving net zero, because when someone saves money into pensions, the pension provider takes the money and invests it in order to secure a long-term return for retirement. When those savings are in sustainable and ethical investments, such as businesses adopting similar practices to Airedale Springs, the pension can play its part by helping not only with retirement but with climate change.
The changes legislated for through the Bill open up a world of possibilities for our pensions to be invested in new and innovative technologies for the future, such as wind power, hydrogen and carbon capture and storage—technologies that help create jobs and aid the transition towards net zero. The Bill means that for the first time, pension schemes will be able to be required to take the Government’s net zero targets into account, as well as the goals of the Paris climate agreement.
I want to take a moment to address some of the amendments before the House. On amendments 16 to 24, the reality is that the Government are already taking powers that will require trustees to set targets for their management of climate risk. So surely an approach whereby we nudge pensions towards investing in a
sustainable and ethical way is the right approach, and that is the one that the Government are taking. Mandatory targets would, in my view, undermine the duty that pension trustees have to invest in the best interests of the people whose pensions they are investing.
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The amendments would also have very little impact on reducing emissions. Pension funds would be forced to sell their high carbon stocks to others who have no regard for environmental concerns, doing absolutely nothing to get us to net zero. Instead, we should work together to nudge firms towards a greener future. We have already seen this in the action that the Government have taken, as well as some corporates. Earlier this year, for example, BP—traditionally an oil and gas company—set its own target for getting to net zero, and many more are doing this too. More than 70% of large pension schemes are already going above and beyond the minimum legal requirements.
We have seen the great work that the Government are doing, such as making ESG regulations and now introducing mandatory climate change reporting. We need to work together in partnership with businesses, not against them, to get to net zero.
In conclusion, it is for those reasons, among many others, that I will support the Government today. I know just how hard the Minister has worked on the Bill, alongside his colleagues, and I thank him for his efforts. Tackling climate change is, of course, of crucial importance and the Bill most certainly marks the next step in our journey to reach net zero.