Understanding sustainable investing

Frequently asked questions

What is ESG?

ESG is an industry term that stands for Environmental, Social and Governance. In all our investment options and offered strategies, we consider ESG factors, and how the risks associated with them might affect the returns of investments. This means that, when investing, we think about factors including environmental impacts, social impacts (issues which affect the fair treatment of people) and governance, which considers the way companies are run.

What is Smart Pension’s commitment to sustainability?

Making sure our investments are truly impactful is at the heart of our investment approach. We make sure our members' pension investments not only do no harm but also make a positive difference to society and our planet. Read about our sustainable pension including our commitment to net-zero, how we invest in sustainable funds and our focus on impact investing. Alternatively, you can watch our Head of Investment Proposition, James Lawrence, explain our approach to sustainable investing in our What is Smart Pension’s commitment to sustainability? video.

What are Smart Pension’s responsible investment principles?

To most people, responsible investing and sustainable investing mean the same thing. 

We are signatories to the UN–supported principles of responsible investment, the world's leader in responsible investing. It is fundamental to our investment approach. Watch our What are our responsible investment principles? video to learn more.

What is Smart Pension’s commitment to Net Zero?

We have partnered with Make My Money Matter to commit to net zero and take action against climate change. Make My Money Matter is creating a movement calling for the trillions of pounds invested in UK pensions to build a better world. To learn more, read Why we signed up to Make My Money Matter and watch our What is our commitment to Make My Money Matter? video.

What is the Paris Agreement?

The Paris Agreement is a global national treaty to address climate change. The goal is to limit global warming to well below 2 degrees, preferably 1.5, to pre-industrial levels. The majority of funds in our default agreement support the Paris Agreement. Learn how by watching our What is the Paris Agreement? video.

What is impact investing?

Impact investing takes sustainable investing to the next level, it relates to investments that are intended to have a positive, measurable, environmental and or social impact as well as a financial return. An example of this would be investing in businesses that benefit the local community such as education, clinical research and renewable energy. Impact investing not only delivers the required financial returns but also achieves meaningful, intentional and measurable benefits for people and the planet. Watch our What is impact investing? video to understand more. 

What are our ethical investment options?

The majority of our funds take into account Environmental, Social and Governance (ESG) considerations, aiming to reduce negative harm on people and our planet. Members will also find an Ethical and Climate fund in their account which can be self-selected. Watch our What are our ethical investment options? video to learn more about our ethical investment approach.  

How does Smart Pension help protect nature?

We recognise that we cannot deliver on our net zero commitment and avoid harm to people and our planet without considering how we protect nature in our investments. Biodiversity supports everything in nature that we need to survive such as food, clean water, medicine and good health. That's why we invest members’ investments in a biodiversity fund and have committed to removing deforestation from our investments. Watch our Investing to improve biodiversity video and read our Road to deforestation-free investments paper to find out more.