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Climate and nature
We are focused on achieving great outcomes for our members. Additionally, it’s our duty to play a part in shaping the world our members will retire into.
Overseeing investments through policies
Our Trustee’s Responsible Investment and Climate and Nature policies are embedded in all of the investment options we provide for members. This includes details of exclusions which apply across all our investment options. Some underlying funds may have stricter exclusions than others. We also have a Voting and Engagement Policy to oversee our stewardship of these funds. See our fund range.
We take care in considering climate and nature investment risks
Economies rely on goods and services generated by natural capital, such as food, raw materials and water, and these goods can be negatively affected by adverse climate conditions. Climate and nature are under unprecedented threat which in turn can threaten the profitability of the companies in which Smart Pension’s funds invest. We take great care in considering climate and nature risks in investments, as well as investment opportunities to help solve these critical global challenges. We recognise that protecting climate and nature is complex and requires suitable investments, targeted engagements, real changes to industries, business structures and from policymakers and we are here to play our part.
Net zero by 2040
We are aiming for our default growth fund to be net zero by 2040. This means balancing greenhouse gas emissions that are produced with the emissions that are removed from the atmosphere. As part of this, we look to take action to halt and reverse biodiversity loss, including deforestation.
Investing in green projects
Our default growth fund, the Smart Sustainable Growth Fund, invests in the Mirova Global Green Bond Fund which finances specific projects with environmental impact, by selecting the opportunities that will reshape our future for a lower carbon world.
Investing in green and sustainable bonds
"We want to help members secure not just long-term financial growth but also a safer, healthier world in which they can enjoy retirement. Our default growth strategy, used by the majority of our members, now invests in the AXA Investment Managers Biodiversity fund. This fund plays a key role in achieving our 2040 net zero target."*
Paul Bucksey, Chief Investment Officer – Smart Pension
Investing in the transition to a lower carbon economy
Our passive equities, in our default growth fund, follow a carbon transition strategy which includes investing in industries that manage the risks of climate change and contribute to solutions.
Investing to improve biodiversity
Our default growth fund, the Smart Sustainable Growth Fund, invests in a biodiversity fund. 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 focussed fund.
*The AXA WF ACT Biodiversity fund is not a targeted net zero strategy, but the strategy is aligned with AXA Group’s commitment to become a net zero business by 2050.
"When choosing the bond fund, it was important to us to ensure transparency and traceability. Mirova produces an impact report that tracks the environmental benefits of projects showing how their fund makes a real difference."
Fiona Smith, Head of Responsible Investment – Smart Pension
Reporting
We report on the progress of our climate targets in our Task Force for Climate-Related Financial Disclosures (TCFD) report. Our investments don’t solely focus on reducing carbon emissions but also aim to invest in solutions to help prevent climate change and nature loss. These developments and projects may not be the lowest emitting sectors or companies. Therefore, in some cases we do not exclude high emitters from our investments, in order to benefit the longer term sustainability of economies.
Voting and engagement
We carry out focused stewardship and engagements with our investment managers and companies with the aim of making real change to businesses and our world, improving the profitability of our investments.
Impact reports
Impact investing goes beyond taking ESG risks into account, reducing exposure to offending companies and increasing exposure to companies with better or improving practices. It seeks to achieve specific social or environmental goals, as well as generate profit.
The Smart Sustainable Growth Fund invests in the Mirova Global Green Bond Fund and the AXA Biodiversity Fund, which both have ‘impact’ goals alongside their longer-term financial targets. These funds may also be invested in through other Smart funds. You can see where funds are invested on their factsheets.
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