Smart Pension has launched three new sustainable lifestyle strategies with different growth fund options.
Alongside its default offering — the Smart Sustainable Growth Fund — it is also now offering the Smart Sustainable Growth Core Fund and Smart Sustainable Growth Plus Fund.
Smart Pension says it is the first UK pension provider to offer customers a range of lifestyle strategies that are all fully sustainable.
Customers who want a more sustainable offering than the default can opt for the Smart Growth Plus fund — although this has higher chargers. Alternatively the Sustainable Growth core option is lower cost than the default though also has slightly lower sustainability criteria.
However, Smart stressed that the components parts of all these growth strategies are classified as Article 8 (or higher) as defined by the EU’s Sustainable Finance Disclosure Regulation. This means they are invested in funds that positively contribute to the planet and society, including investing in areas such as renewable energy projects, clean water and healthcare.
Smart Pension says this will get it meets its target of being net zero by 2040 — 10 yeas ahead of most of its competitors.
Smart says it is now offer a range of options having received feedback from members and employers. This showed there was a spread of views, when it came to how ‘green’ people wanted their pensions to be, and how much they are willing to pay for sustainable investment options.
Smart says its research showed that over three-quarters of respondents believe it is important that pension savings are invested in a way that specifically benefits people and the planet (77.8 per cent). Meanwhile almost a third of respondents wanted to exclude companies and products which could cause harm to the environment or people.
With over half of respondents wanting to engage with companies on these issues and change them for the better, Smart Pension says its investments will continue to have a focus on excluding the least sustainable companies, and prioritise decarbonising over offsetting emissions (52.5 per cent).
Smart Pension’s default fund and its Sustainable Growth Plus fund invest in the Axa Biodiversity Fund, the Mirova Global Green Bond Fund, and a global equity fund with a specific focus on carbon transition.
Smart Pension chief investment officer Paul Bucksey says: “We have listened to our members and our employers and we are focused on giving them more choice over where their money is invested. They can now align their own values with their investments and make a positive impact on society and the planet, with the intention of not compromising on returns. We want to help our members secure long-term financial growth and a safer, healthier world in which they can retire.
“The pension industry has a golden opportunity to drive faster decarbonisation, by investing in businesses that are serious about cutting their carbon emissions. 100 per cent of our flagship growth funds are now invested in sustainable funds and we expect these investments to play a key role in achieving our 2040 net zero target.”
Fiona Smith, investment proposition manager at Smart Pension adds:“We’re delighted to be launching our three new growth funds and proud to be the first pension provider in the UK to offer a choice of growth funds and lifestyle strategies that are 100 per cent invested in sustainable funds and at different price points.
“These funds include allocations to climate-aware strategies and impact investments, such as renewable energy projects, clean water and healthcare.”