The People’s Pension will move £15 billion of its assets into climate aware investment strategies — the biggest single transfer of its kind by a UK master trust to date.
The workplace pension provider says this change will reduce the carbon footprint of these investments by 30 per cent and will means 70 per cent of its default fund will be aligned to the Paris Agreement goal of keeping global warming below 1.5°C.
As a result of this investment strategy, the scheme will divest from companies that produce thermal coal.
The People’s Pension said the primary aim of the change is to manage the long-term risks posed to members’ investments by climate change and a green transition, that aren’t currently being priced by the market.
The strategy will adult the level of investment in companies based upon their exposure to climate risks and opportunities, and tracks regional indices, which aim to exceed the minimum standards of the European Union’s Climate Transition Benchmark.
The People’s Partnership chief investment officer Dan Mikulskis says: “We believe the changes we have announced mean that The People’s Pension is now one of the greenest master trusts in the UK.”
He says this move was based on “conviction” rather than being a box-ticking exercise.
Mark Condron, Chair of The People’s Pension Trustee adds: “This is a hugely significant moment for The People’s Pension and its 6.5 million members as it reinforces our commitment to tackling climate change through investing. Our members can be confident their savings are working towards achieving Net Zero targets and not against it.”
This move follows criticism last week from the campaign group Make My Money Matter than the UK pensions industry was not doing enough to tackle climate concerns. It ranked 20 pension provider on a number of climate and ESG issues, with The People’s Pension towards the bottom of the list.
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