On the go: Aviva is calling on the government to amend the pension schemes bill to make it mandatory for all auto-enrolment default funds to achieve net-zero carbon emissions status by 2050.
Aviva said that while the bill, which is due to have its second reading in the House of Commons on Wednesday, states pension funds should disclose and report on their exposure to climate change, it does not require them to reach a net-zero status.
The UK is legally bound to achieve net-zero emissions by 2050, and pension schemes can help to reach this goal through the government also setting the same requirements on default funds, Aviva stated.
On the back of this, the provider has set the net-zero carbon emissions target for its own auto-enrolment default pension funds. Although the end date to achieve this goal is set at 2050, Aviva is looking at options to move this forward to 2030.
To do this, the provider plans to invest more than £5bn into low-carbon equities and climate transition strategies across its default funds over the next 18 months, and will look to increase this level of investment going forward.
Lindsey Rix, chief executive of savings and retirement at Aviva, said: “The vast majority of savers are invested in a default fund — a fund which may take little account of climate change.
“The government’s requirements for schemes to report on their exposure to climate change is a positive move, but we have a responsibility to go even further for our customers and the next generation of pensioners.
“We believe now is the time to go further. Climate change poses a significant risk to people’s pension savings and our research shows that people want pension funds to help tackle climate change and want the government to act,” Ms Rix added.
This article originally appeared on ftadviser.com
