ESG Spotlight: A roundup of the latest news on environmental, social and governance initiatives, with UK pension funds pledging to commit to net zero by 2050 and Aegon to transition a further £3.5bn of its workplace default funds in June.
UK LGPS schemes and DB master trust commit to net-zero by 2050
South Yorkshire Pension Fund, Wiltshire Pension Fund and TPT Retirement Solutions are new signatories to the Paris Aligned Investment Initiative, where schemes commit to decarbonise their investment portfolios by 2050 and increase investment in climate solutions, in line with a 1.5C net-zero emissions future. The two Local Government Pension Scheme funds and the defined benefit master trust are part of a group of six institutional investors with $617bn (£436bn) in assets that joined the framework on Tuesday, which includes the Dutch ABP — one of Europe’s largest pension funds. The funds will be using the ‘net-zero investment framework’ as the practical basis for delivery of their targets, with the goal to maximise the contribution they make in tackling climate change. The six new signatories will collaborate with a larger group of 38 existing investors, both asset owners and asset managers, representing $8.5tn in assets, that are already using the framework.
Aegon moves £5bn of DC default assets to ESG strategies
Aegon has moved more than £5bn of workplace default assets into ESG investment strategies in March 2021. At the end of June, the pension provider plans to transition a further £3.5bn, which will bring the total to more than £8.5bn. The decision to act now will contribute towards Aegon’s wider ambitions to make its workplace default funds net carbon zero by 2050, and to halve carbon emissions by 2030, the provider stated. As a result of the changes, Aegon’s defined contribution default funds now have 68 per cent of assets for growth stage savers invested in ESG-screened and optimised index funds from BlackRock.
