Aegon has announced its intention to achieve net zero carbon emissions across its default pension fund ranges by 2050 and is exploring whether it can halve them in the next decade.
The provider says the threat of climate change so great that it needs to take action as quickly as possible.
The commitment to be carbon neutral is being addressed both investments and at a corporate level.
Since 2016, Aegon’s main operations – UK, US and the Netherlands – have achieved carbon neutral status by reducing emissions from their own operations and supporting offset projects in cooperation with the NGO ClimateCare.
At the end of 2020 Aegon confirmed those invested in its LifePath strategies, the default for its TargetPlan occupational schemes and master trust, would see a significant increase in its environmental, social and governance (ESG) exposure. By mid-way through this year over half of total LifePath assets, around £3bn, will be invested in ESG strategies.
A survey among Aegon’s customer panel found 77 per cent agree that climate change is an important risk to consider when investing for the future. Nearly half – 45 per cent – felt more strongly and wanted to see investing for a net-zero carbon future made mandatory.
Aegon managing director for investment solutions Tim Orton says: “As investment providers and a responsible business, we have a large part to play in the fight against climate change. We believe that this is not just an environmental issue, but one that is central to the future financial wellbeing of our customers.
“Investors are giving us a very clear message that they want to see action. Aegon and other providers have the power to influence the companies that they invest in and the third-party fund managers who provide investments. Businesses that fail to change, will fail.”
Make My Money Matter CEO Tony Burdon says: “It is great to start the year with news that another pensions giant will commit to net zero emissions, moving us closer to our goal of having all UK pensions signed up to net zero by COP26. This announcement comes on the back of thousands of pensions holders asking their providers to make their money matter, and shows the huge impact public action can have on driving industry reform.
“While Aegon’s 2050 commitment to net zero is a clear step in the right direction, we believe action needs to be urgent and frontloaded to address the scale of the challenge, so their decision to explore halving emissions in this decade sets an example that the rest of the industry must step up to the plate and follow.”
