The General Election and ESG

With the General Election looming, all of the main parties have now published their manifestos, setting out their key pledges and policy aims for the next parliamentary session. The election debates have already produced some heated discussion around areas such as immigration, defence, the NHS and tax levies. 

In past elections, political parties have made bold promises in relation to meeting net zero targets and tackling climate change – and this year is no different. It is not unusual for the pension industry to be drawn into in political parties’ commitments to achieving net zero, and it is clear from the various 2024 election manifestos, that pension schemes will have to consider their responsibilities in relation to Environmental, Social and Governance (“ESG”) factors, no matter which party forms the next government.

We take a look below at a summary of the  the main parties’ ESG and climate change manifesto commitments.

Labour party commitments 

Political commentators and pollsters predict a Labour win in this election, and this will likely result in a marked shift in the pensions landscape.

Labour has said that the pensions industry, financial institutions and select FTSE 100 companies will be key players in improving “security in retirement” and facilitating the government mobilising large sums of money to address climate change. Labour’s manifesto suggests that pension funds and other UK regulated financial institutions will be required to develop and implement “credible transition plans” to help prevent global temperatures rising above the 1.5 degrees Celsius limit noted within the Paris Agreement.

Conservative party commitments 

The Conservative manifesto also made reference to policy initiatives geared towards net zero, but Rishi Sunak is adamant there will be no “unaffordable eco-zealotry”. This statement is echoed by the lack of specific ESG pledges for pension schemes within the manifesto and therefore suggests that, unlike Labour, the Conservatives are not looking to UK financial institutions to lead the charge towards net zero. 

Green party commitments 

As one might expect, the Green Party has adopted a notably firmer stance in relation to ESG and improving sustainability. Their proposed policies include a requirement for all pension schemes to remove fossil fuel investments from their portfolios by 2030. 

Liberal Democrats commitments 

The Liberal Democrats plan to introduce a requirement to demonstrate that pensions are invested in such a way as to contribute to the reduction of greenhouse gas emissions in line with the Paris Agreement. 

They also promise to give regulators the powers they need to ensure that investors are managing climate risks properly. In practice, this may mean that the current legislative requirement for authorised schemes with assets over £1bn to publish annual climate change reports may be extended to smaller schemes as well. 

Reform UK commitments 

Reform UK has taken a markedly different approach. In their manifesto, Reform have pledged to scrap the government’s commitment to achieving net zero, stating that this move would result in a saving of £30bn per year. 

While it is not expected that Reform UK will win a majority in the General Election, trustees of pension schemes should not ignore their stance, as this may become relevant if they gain enough parliamentary seats to allow them to block changes introduced by the government. 


In summary, climate change and net zero are mentioned in all of the key parties’ manifestos. Some parties wish to push towards these environmental goals, while others would rather walk back from the commitments agreed in Paris for economic or other reasons. 

Irrespective of the result on 4 July, we would encourage trustees to look out for our ongoing updates to ensure they are up to speed with how the ESG landscape may change for pension schemes.

If you have any queries on ESG for pension schemes, please contact Kate Granville Smith. 

Current as at 19 June 2024.

Co-written by Sophie Kirk and Marcus Jones