Smart Pension commits to net zero portfolio emissions
UK master trust, Smart Pension, has signed up to Make My Money Matter and pledged to develop its investment approach and commit to net zero emissions well ahead of the 2050 deadline outlined by other schemes.
Smart Pension will take action now to make the required changes as it further pledges to halve its scheme emissions significantly earlier than the 2030 deadline to align with the Paris Climate Agreement.
The workplace pension provider sets a comprehensive industry example ahead of a Glaswegian COP26 later this year and, as part of this, will continue to develop its proposition to invest in products that tackle the climate crisis where it is in members’ best interest. During Q1 2021, Smart Pension will also introduce an allocation to a new Social Impact Fund, which will capture investment opportunities that offer solutions to broader environmental and social challenges such as healthcare solutions for ageing populations, social housing, technologies to improve the use of water and gender equality in employment.
The wellbeing of members remains the driving factor behind Smart Pension’s transition to Net Zero. In tackling the negative impacts of climate change, Smart Pension will help to build a better world for its members as they retire. The transition is expected to have a material impact on the value of investments over each member’s pension lifespan – meaning that the pledge will bring both positive environmental and financial outcomes for Smart Pension’s members.
The announcement aligns Smart with pension industry giants who have contributed to the now over 13 million UK Net Zero pensions since Make My Money Matter’s campaign launched last year.
Paul Bucksey, Managing Director of the Smart Pension Master Trust, says “Climate change is one of the most important issues facing each and every one of us. But achieving great risk-adjusted returns for members while investing for long term environmental and societal benefits aren’t mutually exclusive objectives, and it is important that trustees and scheme sponsors grasp the opportunity that this offers.
“Having repositioned the Smart Pension default investment strategy to focus on companies with high Environmental, Social and Governance (ESG) scores, and with an upcoming additional allocation to Social Impact, we’re delighted to further underline our commitment to sustainable investing by partnering with Make My Money Matter.
“We are really excited about the difference our scheme can make over the short and medium term, and are currently actively working with our partners to develop funds that actually decarbonise the economy rather than offsetting in other ways - which does not address the real problem. As you can expect with Smart Pension we are looking to bring real innovation in this space for the benefit of society and our members, and plan to make some further exciting announcements over the coming months.”
CRichard Curtis, Co-Founder of Make My Money Matter, says: "Smart Pension’s announcement sets a glowing example for the pensions industry. In pledging to take action now and make these changes in advance of the deadlines, Smart aligns itself with the aims of the Paris Climate Agreement that seek to limit global warming to a maximum of 1.5 degrees Celsius and avoids paying corporate lip service.
“As one of the first master trusts in the UK to appoint a Head of Sustainable Investing, we applaud the further measures that Smart Pension will take – such as proactive impact investment into solutions that actively tackle climate change and social issues. This robust pledge shows that the pensions industry can harness its hidden superpowers to not only deliver health returns, but also a healthy planet to retire into.
"Smart Pension joins a growing list of organisations stepping up to ensure their pensions are fighting, not causing climate change, and we urge all schemes to follow suit ahead of the international climate change conference this November.”