We are living in an ageing world; people are living longer. We are living on an ageing planet; in a climate emergency. So how does the topic of longevity fit into the climate change agenda? What is the coherent policy response to the interface between climate change and an ageing society?
ILC-UK, in collaboration with the ILC Global Alliance and AAG are building a ‘Climate change in an ageing world’ initiative to be launched alongside the COP26 (November 2021).
This webinar provided an opportunity to feed into the scoping and planning of our initiative.
4. Chris Knight
CEO, Legal & General Retail Retirement
Join the conversation: @ilcuk
#AgeingPlanet
5. Climate Change
and the Ageing
Demographic
Chris Knight
CEO, Legal & General Retail Retirement
6. Confidential
The Ageing Demographic and Climate Change
Two of the great megatrends of our economy and society
Sources: https://www.ipcc.ch/report/ar3/wg1/chapter-9-projections-of-future-climate-change/
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
2016 2026 2036 2046
UK over-80 population projections, 2016-2046
By 2036 there will be more than 5m people aged over 80
in the UK, an increase of 2m from 2016
Climate Change and The Ageing Demographic6
“The Intergovernmental Panel on Climate Change (IPCC) considers it likely
that the rise in atmospheric temperature will reach 1.5 °C degrees within the
next 35 years.
The current century trajectory is towards a rise of around 3.2 °C.”
https://doi.org/10.1007/s12062-019-09255-5
1.5 °C degrees within the next 35 years
7 million in 2046IPPC Projections
of Future Climate
Change
7. Confidential
Behind the headlines: in the UK,
housing is a key intersection
between Ageing and Climate
The UK’s energy inefficient housing stock needs at least
£65bn to upgrade
• In the UK, our built environment is responsible for
almost 30% of total greenhouse gas emissions
• The UK has the oldest housing of EU Member
States, with nearly 38% of its homes dating from
before 1946
• Domestic housing and energy are also linked to
fuel poverty. Energy consumption increases
rapidly after the age 70, following a stabilizing
trend in consumption between the ages 60 and 70.
Climate Change and The Ageing Demographic7
Meeting the 2035 target alone will require a total
investment in energy efficiency upgrades of up
to £65 billion - the broader decarbonisation
challenge will require even greater sums of
public and private capital to be mobilised
8. Confidential
But the money is there…
Climate Change and The Ageing Demographic8 L&G Analysis, CME 201112
£1.7tn
of housing equity
owned by the over-55’s
£950bn
of UK DC Pensions
savings by 2028
9. Confidential
Three key Legal & General
climate change programmes
9
What can financial services do to support both
the ageing society and the target to achieve net
zero carbon by 2050?
“We have to Build Back Better after Covid-19.
Construction is rocket fuel for UK economic growth:
every pound invested delivers a threefold economic
multiplier and the housebuilding sector provides
jobs and vital economic resilience. But as we
accelerate building, we have to avoid stoking up
a climate crisis that would be at least as serious
as the COVID”.
Nigel Wilson, Legal & General CEO
123 of ESG investing
1 ESG factors are financially material.
2 We have a responsibility to effect positive change in
companies & assets we invest in, & for society as a whole.
3) We have a responsibility to many stakeholders
Climate pledge
LGIM’s Climate Pledge now includes publicly available
traffic light ratings for around 1,000 companies -
representing 60% of greenhouse gas emissions from
listed companies
Net Zero housing
L&G built houses will be operationally net zero by 2030
10. Confidential
Conclusions
• We know our customer demographic are
environmentally aware & concerned.
• Older homeowners can use the equity they
have built up to retrofit their homes to be more
energy efficient. Home improvements are the
most popular reason for taking a lifetime
mortgage, with 36% of people giving this as a
reason for releasing cash from their house.
• We want to support this so we are providing
incentives to our Lifetime Mortgage customers
to green their homes.
• The UK will find it harder to meet its promises
on decarbonisation if it cannot retrofit its older
housing stock to become more energy efficient.
• We need to ask what legacy are we leaving?
Climate Change and The Ageing Demographic10
Ageing and Climate Change
Installing an air source heat pump
could cut a home’s CO2 emissions
by 2600 kg per year, saving close to
£700 in the process.
13. Prof Thomas Scharf
Professor of Social Gerontology, Newcastle
University
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#AgeingPlanet
14. Q&A
Please submit your questions to panellists
via the Q&A tab
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#AgeingPlanet
15. Closing remarks
Redvers Lee, Head of Partnerships and
Development, ILC
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#AgeingPlanet
16. Future of Ageing 2020:
Together for tomorrow
Date: Thursday, 3 December 2020
Time: 9.00am - 5.30pm
Speakers include: Guy Opperman MP,
Sir Andrew Dilnot, Cat Smith MP and Sir
Michael Marmot
Register at: futureofageing.org.uk
Join the conversation: @ilcuk
#FutureOfAgeing
futureofageing.org.uk
Meryam Omi from Legal & General warned: “Decisions policymakers take now will decide the success of the UK’s ambitious net-zero target. They’ll have implications for decades.
“Implementing an ambitious ‘green’ recovery package, with clear pathways for companies to build aligned strategies and for investors to direct capital into ‘green’ projects at scale is now matter of necessity, not choice."
Explainer for the IPCC graph: (b) Historical anthropogenic global mean temperature change and future changes for the six illustrative SRES scenarios using a simple climate model tuned to seven AOGCMs. Also for comparison, following the same method, results are shown for IS92a. The dark blue shading represents the envelope of the full set of thirty-five SRES scenarios using the simple model ensemble mean results. The light blue envelope is based on the GFDL_R15_a and DOE PCM parameter settings.The bars show the range of simple model results in 2100 for the seven AOGCM model tunings.
The UK housing stock is responsible for approximately 20% of the country’s total greenhouse gas emissions, and the challenge of decarbonising our built environment could result in a 40% shortfall to our economy-wide decarbonisation targets by 20301 , unless it is addressed at pace. https://www.greenfinanceinstitute.co.uk/wp-content/uploads/2020/06/Financing-energy-efficient-buildings-the-path-to-retrofit-at-scale.pdf
https://www.bre.co.uk/filelibrary/Briefing%20papers/92993_BRE_Poor-Housing_in_-Europe.pdf
https://doi.org/10.1016/j.erss.2019.05.006
This issues affects all generations but all generations have assets too.
At Legal & General, our success depends on the sustainability of the societies we rely on, and today, that means using inclusive capitalism to create a decarbonised economy, fairer societies and more responsible business. Here are a few initiatives that demonstrate how this works.
123 of ESG investing
1 Environmental, social and governance (ESG) factors are financially material. Responsible investing is essential to mitigate risks, unearth investment opportunities and strengthen long-term returns for clients.
2 We have a responsibility to effect positive change in the companies and assets in which we invest, and for society as a whole. To us, this means active ownership and engagement through stewardship and cross-asset research.
3) We have a responsibility to many stakeholders. When we allocate capital, we conduct extensive research into potential environmental and societal outcomes.
**
LGIM’s Climate Pledge now includes publicly available traffic light ratings for around 1,000 companies - these represent 60% of the greenhouse gas emissions from listed companies - a tenfold increase in analysis and coverage, with voting and investment sanctions applied to ‘laggard’ companies
L&G built houses will be operationally net zero by 2030
--
Our approach to tackling climate change across the business encompasses a number of routes, including:
• Supporting policy efforts to meet emission reduction targets, to encourage capital deployment at scale, in order to finance the transition towards a low-carbon economy, and to accelerate investments in climate change adaptation.
• Developing our capacity to assess climate-related risks and opportunities
• Engaging with the companies in which we invest to ensure investee companies’ strategies are aligned with global climate goals
• Providing investment solutions & products that are in line with low-carbon opportunities
63% of households in England are homeowners (around 14.6 million households). We are a nation that is on the whole fixated on owning property. We don’t use this property as an asset anywhere near enough, however frequently we use it as a legacy.
-
But what legacy are we leaving the next generation? Will these homes be fit for purpose in the future? Or are we increasingly leaving the next generation an albatross around the neck of a home that does not meet future emission targets.
NB Energy Saver Cashback for Lifetime Mortgage Customers
Home improvements are the most popular reason for taking a lifetime mortgage, with 36% of people giving this as a reason for releasing cash from their house.
We know our customer demographic are environmentally aware & concerned
The offer (which coincides with the government’s £2bn Green Homes Grant** scheme), is now open for applications.
Improvements covered include double glazing, insulation, ground source or air source heat pumps, solar panels and heating controls.
-
Property’s value as an asset will become increasingly correlated with climate risk – this highlights both the urgent need to improve our building stock and future-proof balance sheets.
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Is retrofitting our existing housing stock in fact essential in order to create a suitable legacy for the next generation.
We have an actively engaged network of experts, policy makers and practitioners, including long standing relations with UCL; our first partner
