Smart Pension, one of the UK’s leading workplace pension schemes, announces that it aims to reduce the emissions of its default growth fund by 75% by 2030. This new target swiftly follows the announcement that Smart Pension had achieved a 50% cut in default growth fund emissions in 2022, two years ahead of target. This represents considerable progress towards the company’s target to make its default growth fund net zero by 2040.
Smart Pension, which manages more than £4bn 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.
This new interim target is also aligned with one of the key focuses of this year’s COP 28, to fast-track the energy transition and slash emissions before 2030. Smart Pension’s new target is also well ahead of the goals of the 2015 Paris Agreement, which called for emissions to be reduced by 45% by 2030 and to reach net zero by 2050.
The news comes after Smart Pension announced it had become the first UK pension scheme to offer customers a choice of three sustainable lifestyle investment strategies, in January 2023. All three utilise growth funds that take into account environmental, social and governance (ESG) factors and aim to positively contribute to the planet and society. The growth fund in the default strategy also includes impact investments 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 Article 8 or 9 or equivalent through the Sustainable Finance Disclosure Regulation, a technical standard by the European Commission. Smart Pension continues to make considerable progress in incorporating investments with a strong sustainability focus into its portfolio.
Paul Bucksey, Chief Investment Officer at Smart Pension, commented:
“We are delighted to announce this new interim target to reduce emissions in our default growth fund even further. We are proud to be at the forefront of the UK’s sustainability drive, having committed to some of the most ambitious and challenging 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. We continue to secure our members long-term financial growth by investing sustainably, which will lead to a safer, healthier world in which they can retire.”
Launched in 2015, Smart Pension exceeds £4bn 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.