Net zero pioneers

Since the launch of Richard Curtis’s Make My Money Matter campaign in the summer of 2020, over 20 pioneer pension schemes and providers have made various net zero commitments – details are below the logos (logos are in alphabetical order, media announcements are in chronological order):

Nest – The National Employment Savings Trust (Nest) was the first scheme to make a net zero commitment in a press release on 29 July 2020 announcing its new climate change policy. Under the policy, Nest will
move the equity element of its portfolio (45% of total assets, with a value at the time of £5.5 billion) into climate aware strategies, with the ambition of making the 9 million member scheme net zero by 2050.

South Yorkshire – A couple of months later, on 30 September 2020, the South Yorkshire Pensions Authority (SYPA) agreed to set a goal for its investment portfolios to become carbon neutral by 2030. SYPA runs the Local Government Pension Scheme (LGPS) in South Yorkshire, with a fund of over £9 billion and around 160,000 members, drawn from over 550 employers in the county, including the Metropolitan Councils of Barnsley, Doncaster, Rotherham and Sheffield.

Northern LGPS – The next month, three other northern sections of the LGPS followed suit, covering Manchester, Merseyside and West Yorkshire. Their 22 October 2020 press release set out a commitment for the investment of NLGPS’s pension assets to achieve net zero carbon emissions by 2050. Between them, the Greater Manchester Pension Fund, the Merseyside Pension Fund and the West Yorkshire Pension Fund have assets of £44 billion and over 800,000 members.

Aviva – At the start of October, the UK’s largest insurer, Aviva, had announced a new 2050 net-zero carbon emissions target for its automatic enrolment default pension funds, covering about 4 million savers or “the vast majority of savers” according to Lindsey Rix, Aviva’s CEO of Savings and Retirement. In March 2021, Aviva went further – see below.

BTPS – A week after Aviva, the UK’s largest private-sector scheme, the BT Pension Scheme (BTPS), announced its own net zero goal for its entire £55 billion portfolio but with a more ambitious target of 2035. Their 8 October 2020 press release highlighted survey results that three quarters of their 300,000 members expect BTPS to consider the environmental impacts of its investments.

Phoenix Group – Not long before Christmas 2020, the UK’s largest long-term savings and retirement business, Phoenix Group, announced its commitment for its investment portfolio to be net zero carbon by 2050. Phoenix’s 3 December 2020 press release confirmed that, in total, Phoenix Group administers circa 14 million policies and over £300 billion of assets.

Aegon – The first pension provider to announce a net zero target in 2021 was Aegon in a 14 January 2021 press release. Like Aviva, Aegon’s target is to be net zero by 2050 for its automatic enrolment default pension funds.

Cushon – On 20 January 2021, ISA provider Cushon launched the “world’s first net zero pension”. Rather having to wait until 2050, Cushon’s USP is that it is a workplace pension which is Net Zero Now.

Smart Pension – In a 1 February 2021 press release, “prominent” master trust Smart Pension commits to “Net Zero emissions well ahead of the 2050 deadline outlined by other schemes”.

Scottish Widows – Unlike Aviva and Aegon whose October and January commitments were focused on their automatic enrolment pension funds, Scottish Widows (part of Lloyds Banking Group) announces in an 8 February 2021 press release that it is targeting for its entire portfolio of pension investments (currently £170 billion) to be net zero by 2050, across its 6 million UK customers.

The Scottish Widows announcement states that this almost doubles the “meaningful commitments” the pension industry has pledged to reaching net zero targets, i.e. from £177 billion (already pledged by the schemes and providers above) to a new total of £347 billion.

However, with total UK pension assets estimated to be about £2.52 trillion, this still leaves a £2.17 trillion (86%) ‘green gap’ of pension savings not held in funds committed to net zero

Aviva again – On 1 March 2021, Aviva announced that it will be a net zero company by 2040, both in its operations and supply chain, and in all the investments Aviva makes for its customers and shareholders.

Avon, Church of England, Cornwall, Devon, Environment Agency, Lloyds Banking Group, National Grid, Oxfordshire and Royal London – On 10 March 2021, these further nine pension schemes and providers made net zero commitments as part of the global launch of the Net Zero Investment Framework from the Institutional Investors Group on Climate Change (IIGCC). Global uptake of the Framework will now be driven through the Paris Aligned Investment Initiative (PAII), which is a grouping of the IIGCC and three other similar groups together covering Europe (IIGCC), North America (Ceres), Asia (AIGCC) and Australisia (IGCC).

Legal & General – On 31 March 2021, L&G sets out in a press release its roadmap to net zero for its workplace and mastertrust defined contribution (DC) pension investments.