In the highly unlikely event that Greta Thunberg grows up and gets a job at the average British company (yes, highly unlikely) then there would be almost nothing she could do to stop part of her pay going every month into a company pension that would, in turn, stuff the money into oil companies such as Shell and BP.

It’s 2019, and computer processing has transformed every part of our financial lives – from contactless payments to instant online shopping. So why, when the climate crisis demands urgent action, is it still virtually impossible to control where the biggest sum of money any of us are likely to accumulate – our pension – is invested?

Do you want to make sure your pension money is not being used to support the extraction and burning of coal? Fracking? Or drilling for oil in the Amazon or Antarctic? Good luck with that.

We have a pensions infrastructure in the UK which is fundamentally unfit for purpose when it comes to climate change

There are almost no company pension schemes in Britain that allow the employee to stop their money going into fossil fuel extraction. Yet it should be as simple as pressing a few buttons on a workplace computer. Instead, we have a pensions infrastructure in the UK which is fundamentally unfit for purpose when it comes to climate change.

This is not to argue that you should be forced to “divest” your pension from fossil fuel companies. Environmentalists make a good case that investing in oil companies will be a bad financial decision – because the huge reserves of oil that make up much of their value will become “stranded assets” as we stop burning fossil fuels. But the shares of oil companies may still be great investments. After all, tobacco companies have flourished (BAT is now the seventh biggest company in Britain) despite all the evidence of how smoking kills.

But the important point is that no one is forced to invest their company pension in tobacco stocks, with almost every scheme offering an ethical fund that “screens out” shares in cigarette companies. That’s not the case with fossil fuels.

In no other area of consumer expenditure does the buyer – you and me – have so little control and choice. Your employer, not you, chooses where your pension money is invested. It picks whether the likes of Aviva, Aegon or Legal & General will manage your pension savings while at work. But it’s you, the employee, who pays and bears the risk. “There is a huge mismatch between customer and provider,” says Beau O’Sullivan of campaigners ShareAction.org. “The person bearing the investment and climate change risk is not the person choosing the scheme.”

Maybe you’re thinking, hold on, doesn’t my employer offer a range of funds for me to invest in? And if I’m a real keeno, can’t I go into the scheme and pick and choose where the money goes?

The climate crisis must mean the end of British summer holidays in Spain | Patrick Collinson Read more

You’re right, but only to a point. Most company pension schemes will automatically “default” you into a prescribed “lifestyle” or “target” fund. In turn, it’s then invested across a range of international shares and bonds. Almost without exception these will include large investments in the likes of Shell and BP (oil and gas) and Glencore and BHP (coal).

If you want to take more control, most schemes allow you to, say, put more into emerging markets and less into UK shares. Most will also allow you to divert your money into the “ethical” fund, which avoid tobacco, arms and gambling stocks. But only a tiny number of ethical funds screen out oil, gas and coal companies, and the chances they’ll be available in your company pension set-up are very low.

Many of the big Scandinavian and Dutch schemes have already pulled their investments from companies that, say, violate the Paris climate agreement, such as AP of Sweden’s decision to divest from Exxon Mobil.

The world’s largest sovereign wealth fund, which manages $1tn (£786bn) of Norway’s assets – ironically mostly derived from oil – has also been given the go ahead for the largest fossil fuel divestment to date by dropping more than $13bn of investments, including Glencore and Anglo-American.

Britain is behind the curve. Pension funds will argue that they are devoting time and resources to socially responsible investment, and that they are “engaging” with companies on climate change, which they are. But they need to be bolder and offer simple, accessible ways for savers to opt out of fossil fuels entirely. It’s a choice that for too many people is currently denied.

p.collinson@theguardian.com