Smart Pension commits to net-zero emissions ahead of Government deadline

Smart Pension will also introduce a new Social Impact Fund in the next few months

Last summer, Comic Relief co-founder Richard Curtis launched a campaign pressuring UK pension funds to halve the emissions of their portfolios by 2030 and bring them to net-zero by 2050.

Called ‘Make My Money Matter’, the campaign’s overarching ambition is to fundamentally shift the way in which the UK’s £3trn pension pot is invested, uniting consumers, employers and policy to do so.

Smart Pension is the latest company to join the initiative. It has pledged to develop an investment approach and net-zero strategy before 2050. This included a pledge to halve its scheme emissions before 2030.

“Climate change is one of the most important issues facing each and every one of us. But achieving great risk-adjusted returns for members while investing for long term environmental and societal benefits aren’t mutually exclusive objectives, and it is important that trustees and scheme sponsors grasp the opportunity that this offers,” Paul Bucksey, managing director of the Smart Pension Master Trust said.

“We are really excited about the difference our scheme can make over the short and medium-term, and are currently actively working with our partners to develop funds that actually decarbonise the economy rather than offsetting in other ways – which does not address the real problem. As you can expect with Smart Pension we are looking to bring real innovation in this space for the benefit of society and our members, and plan to make some further exciting announcements over the coming months.”

Smart Pension will also introduce a new Social Impact Fund in the next few months, which will aim to capture investment opportunities that are focused on environmental and social solutions.

Make My Money Matter has been backed by more than 20 organisations. Among them are Oxfam, WWF, BNP Paribas UK, Triodos Bank and the Environment Agency Pension Fund – one of the UK’s largest government pension schemes. The Environment Agency is notably targeting net-zero in its operations and supply chain by 2030.

UK pension schemes will be mandated to disclose the climate-related risks posed to assets in their portfolios by the end of 2022, the Department for Work and Pensions (DWP) has said.

Under the proposed changes, pension schemes with £5bn or more in assets under management will be required to assess and publicly report on the physical and transition risks facing assets in their portfolios by the end of 2022. This requirement would affect around 100 schemes.

Smaller schemes which still have more than £1bn of assets under management would then be subjected to the same requirement by the end of 2023. Once this roll-out is complete some 70% of the UK’s pension sector, in terms of assets under management, would be covered.

Matt Mace