Smart Pension achieves 50% cut in default growth fund emissions

Smart Pension achieves 50% cut in default growth fund emissions

Smart Pension, one of the UK’s leading workplace pension schemes, has become the first to announce that it has halved the emissions of its default growth fund. This is over two years ahead of the 50% reduction target it announced in June 2022 and represents considerable progress towards the company’s pledge to make its default growth fund net zero by 2040. This is also well ahead of the goals of the Paris Agreement, which called for emissions to be reduced by 45% by 2030 and to reach net zero by 2050.

Smart Pension, which manages more than £2.5bn in assets on behalf of more than one million UK savers, continues to prioritise decarbonising over offsetting emissions. This puts the company at the forefront of the industry from a sustainability perspective.

The news comes after Smart Pension announced it had become the first UK pension scheme to offer customers a range of lifestyle strategies that are all sustainable, including the Smart Pension default fund, in January 2023. All three growth funds fully invest in funds that positively contribute to the planet and society, including investing in areas such as renewable energy projects, clean water and healthcare.

All the components that Smart Pension now uses across the three growth funds are classified as Article 8 or higher through the Sustainable Finance Disclosure Regulation, a technical standard introduced last year by the European Commission.

Smart Pension has announced considerable progress in incorporating investments with a strong sustainability focus into its portfolio. The company is a member of leading global sustainability initiatives and announced in June 2022 that its default growth fund will be net zero by 2040.

Paul Bucksey, Chief Investment Officer at Smart Pension, commented:

“We are delighted to announce that we have halved the emissions in our default growth fund. We are proud to be at the forefront of the UK’s sustainability drive, having committed to some of the most ambitious and challenging green targets in our industry, and we are already exceeding them. 
The pension industry has a golden opportunity to drive faster decarbonisation, by investing in businesses that are serious about cutting their carbon emissions. This is exactly why we have an unwavering focus on achieving our 2040 net zero target. We want to help our members secure not just long-term financial growth but also a safer, healthier world in which they can retire.”

Tony Burdon, CEO at Make My Money Matter, commented: 

“The ambition and progress displayed by Smart Pension is good to see. We welcome that Smart has acknowledged the critical role our pensions play in tackling the climate crisis, and recognise the important work undertaken to integrate sustainability into its default offer.
We know this is what savers increasingly expect from their pension schemes, and so this year we need the whole industry to meet this demand with accelerated action. Through robust stewardship, real world emissions reductions and investments into industries that are tackling the climate crisis, schemes can shape a better, more liveable world for our retirement, all while delivering good returns for their members.”

About Smart Pension

Launched in 2015, Smart Pension exceeds £5bn in assets under management (AUM) and now serves over one million members and more than 70,000 employers. It is powered by Keystone, Smart’s global savings and investments technology platform.

Aquiline Capital Partners, Barclays, Chrysalis Investments, DWS Group, Fidelity International Strategic Ventures, J.P. Morgan, Legal & General Investment Management, Link Group and Natixis Investment Managers are all investors in Smart Pension.