Nine out of 17 leading DC providers – Aegon, Atlas, Aviva, Legal & General, Nest, Smart Pension, Scottish Widows, Standard Life and The People’s Pension have committed to net zero emissions by 2050 for their DC assets, as the concept becomes mainstream for workplace schemes, according to the ESG in DC Pensions Report from Corporate Adviser Intelligence.
Cushon has pledged to be net-zero-now by paying to offset the emissions caused by its asset holdings from its own funds.
Fidelity says it will be making a net zero commitment for its FutureWise default fund shortly, while Evolve is in the process of developing a proposition with its partner AB. The Lewis Master Trust is also planning to introduce a net zero, while Mercer says it is actively discussing doing so. Hargreaves Lansdown, LifeSight and TPT have no net zero target for their defaults. Royal London declined to reveal details of its offering.
Scottish Widows has extended its net zero pledge for its entire asset portfolio, and Standard Life parent Phoenix has pledged all the investments it has influence over will be net zero by 2050.
Twelve master trust and GPP providers have a default proposition that invests in funds using ESG screens or tilts. Two years ago just five providers took such an approach. Hargreaves Lansdown and Standard Life are the only providers that have no specific sector tilts or screens across their defaults funds.
Seven providers exclude tobacco investments from their investments. All exclude cluster bombs and controversial weapons. Just one, TPT, excludes investments in animal testing and the fur trade.
The vast majority of master trusts and GPPs have no set allocation to impact investments, with the exception of Lewis Master Trust, which has a 10 per cent allocation. Smart Pension is looking to move to a 6 per cent allocation in 2021, and Mercer is planning some exposure.