Aegon UK has published its ‘climate roadmap’ setting out the company’s plans to reduce the carbon footprint of its investments.
This will start with its workplace default funds and include short-term emission reduction target alongside longer term net zero pledges.
In addition Aegon has also announced it will be investing a further £500m in climate solutions by 2026 — with a view to increase this investment over time.
Climate solutions are investments that positively contribute to climate change. Aegon says there is a need to both decarbonising existing portfolios and invest directly in climate solutions in tier to tackle climate change and meet industry guidance on this issue.
It says action is needed as it is clear the world is not on track to meet the goal of the 2015 Paris Agreement, to keep global average temperature to well below 2°C above pre-industrial levels, and deally at 1.5°C.
Aegon UK’s 2022 annual responsible investment customer panel found that climate change is a major concern for UK investors, with almost three quarters of customers agreeing climate change is an important risk when investing.
Aegon UK’s chief investment officer Tim Orton says: “Climate action failure is the biggest challenge facing our planet today. We have a responsibility to use our size and resources to help address this challenge.
“Our Climate Roadmap shows how Aegon UK is embracing change to succeed in the net-zero transition, starting with our default funds. I hope that being transparent about our climate targets and progress will inspire others to do the same and increase accountability across the pensions industry.”
Hilkka Komulainen, head of responsible investing at Aegon UK adds: “The global economy is at an inflection point, and as one of the UK’s largest pension providers, we must do what we can to mitigate the systemic portfolio risks of climate change. Protecting customers from the worst effects of climate change requires urgent action, and I am especially proud of our short-term targets and commitment to taking action now.”
As an asset owner, Aegon UK believes that engagement is a key tool to drive systemic changes needed to fight climate change and transform economies. Aegon UK’s climate roadmap shows how it engages with customers, asset managers, policy-makers and industry groups.
Make My Money Matter CEO Tony Burdon adds “More climate action is urgently required from the finance industry. The time for clear plans and action is now, as further down the line could be too late. We are pleased to see that Aegon UK is making positive strides in this direction and want to see the whole pensions industry step up and address the major climate risks and opportunities that we face.”
