DC workplace schemes are making strong progress on net zero objectives, with 14 large multi-employer providers halving emissions on their main default, five years ahead of 2030 targets.
These findings were contained in Corporate Adviser’s latest Responsible Investment in DC Pensions report.
CLICK HERE TO DOWNLOAD A COPY OF THE RESPONSIBLE INVESTMENT IN DC PENSIONS REPORT
The report shows that the average carbon footprint of DC schemes now stands at 41.6 tCO2e/£m – a 19.3 per cent reduction on last year’s report.
NatWest Cushon, The Lewis Workplace Pensions Trust and Aon have the lowest carbon footprint figure for DC portfolios — with NatWest Cushon reducing its carbon footprint by 84 per cent since 2019.
Now in its eighth year, this report offers a granular look at the sustainability, RI and ESG strategies used by DC providers and their asset managers – and details the individual carbon footprint for the default strategies of all leading DC schemes, alongside information on the plethora of other climate metrics schemes now deploy.
The report also details how wider responsible investment (RI) objectives are affect specific investment decisions, in relation to individual sectors and stock selection — helping advisers and consultants assess whether a pension schemes aligns with a company’s broader environmental and social responsibility goals.
The data in the report shows that all providers included in this report now have full exclusions on companies manufacturing or selling banned weaponry, including cluster bombs, as well as partial or full exclusions on the most polluting types of fuel, including coal. Around half of the DC providers surveyed (11 out of the 19) are also looking to reduce exposure to fossil fuels generally through tilts and partial exclusions.
The report also looks at the stewardship activity conducted by both larger schemes and asset managers, particularly when it comes to driving real world impact. This shows that over the past few years there has been greater alignment between asset owners and the asset managers on wider sustainability issues objectives.
The report is published at a time where there has been increased political backlash in the US against net zero, sustainability and ESG which has impacted asset managers in the region. However the report makes clear that while there has been increased political debate about this issue in the UK and Europe, this has yet to have a material impact on the investment strategies of the asset owners and manager in this region, including the UK’s largest DC workplace schemes.
CLICK HERE TO DOWNLOAD A COPY OF THE RESPONSIBLE INVESTMENT IN DC PENSIONS REPORT