ESG spotlight: A roundup of the latest news on environmental, social and governance initiatives, including a new climate change report for actuaries, Smart Pension announcing a net zero target for 2040, and savers supporting the government’s push for greener pensions.
Report addresses actuaries’ climate change knowledge gaps
To address gaps in actuaries’ knowledge of the science behind climate change, the Joint Forum on Actuarial Regulation published a report on this topic on June 28, which aims to give actuaries confidence to increase their contributions on this matter. The document, created in collaboration with five institutions — the Financial Reporting Council, the Institute and Faculty of Actuaries, the Financial Conduct Authority, the Pensions Regulator, and the Prudential Regulation Authority — highlights the urgency of climate change and the role actuaries have to play in mitigating its risks. David Fairs, TPR’s executive director of regulatory policy, analysis and risk, said: “We welcome work to help improve actuaries’ understanding of climate-related risks and opportunities, so they are better equipped to help trustees manage, and ultimately protect, savers’ retirements.”
Smart Pension announces default fund net zero target
Workplace pensions provider Smart Pension has announced that its default growth fund will be net zero by 2040, aiming to halve its carbon emissions between 2019 and 2025. The master trust noted that these objectives are “well ahead of the goals of the Paris Agreement, which called for emissions to be reduced by 45 per cent by 2030 and to reach net zero by 2050”. Smart Pension will achieve this goal by increasing investment into companies “which are innovating for good”, including firms working to improve energy efficiency, transition from fossil fuels, create sustainable agriculture, and reuse materials. Previously, the master trust had announced a net zero goal by 2050.
Over a third of savers support government’s green pensions push
Thirty-six per cent of individuals are in favour of government policies that force pension schemes to mitigate for climate change, according to research from My Pension Expert. The financial advice company’s survey, which polled 1,003 UK adults aged 40 and over with pension savings, showed that more than two in five (43 per cent) of respondents support plans for pension schemes to transition away from investments that are driving deforestation. With more than two-fifths (43 per cent) of savers understanding what ESG means, more than one in seven (15 per cent) claim that this issue is a consideration within their retirement investment strategy.
