Smart Pension’s default fund is now fully sustainable, according to the master trust provider, incorporating an increased number of investments with a specific focus on ESG issues.
Smart says this announcement means it is on target to meet its goal of being net zero by 2040, with the aim of halving its emissions by 2025.
Smart says that all of the constituent funds within its default are are rated Article 8 or higher by the Sustainable Finance Disclosure Regulation, a technical standard recently introduced by the European Commission. It says this means the investments are predominantly tilted towards companies with strong ESG credentials, such as companies investing in sustainable agriculture and renewable energies.
This news comes after Smart Pension recently agreed a biodiversity partnership with AXA IM, with the aim of bolstering the master trust’s investments into decarbonisation and companies that are addressing biodiversity loss.
In October 2021, Smart Pension signed up to the Institutional Investors Group on Climate Change and has also committed to the Impact Investing Institute’s Impact Investing Principles. The master trust also invests into a private credit fund whose investment decisions are grounded in ESG principles, and provides rare access to this asset class in DC pension schemes.
Smart Pension chief investment officer Paul Bucksey says: “Three years ago, we set out to incorporate more investments with a strong sustainability focus into our portfolio. We’re glad to have now reached the milestone of our default fund being 100 per cent sustainable – up from 70 per cent this time last year. Along with our other sustainability efforts, this means we are firmly on track to achieve our 2040 net zero target.”
