Three new fully sustainable investment strategies

Smart Pension, one of the UK’s leading workplace pension providers, announces the launch of three new fully sustainable lifestyle strategies with different growth fund options: the Smart Sustainable Growth Core Fund, Smart Sustainable Growth Fund (the Smart Pension default fund) and Smart Sustainable Growth Plus Fund. All three growth funds fully invest in funds that positively contribute to the planet and society, including investing in areas such as renewable energy projects, clean water and healthcare. 

Smart Pension is the first UK pension provider to offer customers a range of lifestyle strategies that are all fully sustainable, including the Smart Pension default fund.

All the components that Smart Pension now uses across the three growth funds are classified as Article 8 or higher through the Sustainable Finance Disclosure Regulation, a technical standard introduced last year by the European Commission.

Retirement savers can now choose one of three Smart Pension funds, depending on how sustainable they want to be and how much they want to pay in charges. The Smart Sustainable Growth Fund is the default fund and members can flex up (Plus) or down (Core) in terms of sustainability and cost. 

Smart Pension believes these new options are aligned to member views, having received feedback from members and employers. A recent survey of Smart Pension members showed that they have differing views on how sustainable they want their pension investments to be and how much they are willing to pay to be sustainable. Over three-quarters of respondents believe it is important that pension savings are invested in a way that specifically benefits people and the planet (77.8%). Almost a third of respondents wanted to exclude companies and products which could cause harm to the environment or people. 

With over half of respondents wanting to engage with companies on these issues and change them for the better, Smart Pension’s investments continue to have a focus on excluding the least sustainable companies, and prioritise decarbonising over offsetting emissions (52.5%).

Smart Pension’s default fund (Smart Sustainable Growth) and the Smart Sustainable Growth Plus fund invest in the AXA Biodiversity Fund, the Mirova Global Green Bond Fund, and a global equity fund with a specific focus on carbon transition. 

Smart Pension has announced considerable progress in incorporating investments with a strong sustainability focus into its portfolio. The company is a member of leading global sustainability initiatives and announced that its default growth fund will be net zero by 2040. 

Paul Bucksey, Chief Investment Officer at Smart Pension, commented:

“We have listened to our members and our employers and we are focused on giving them more choice over where their money is invested. They can now align their own values with their investments and make a positive impact on society and the planet, with the intention of not compromising on returns. We want to help our members secure long-term financial growth and a safer, healthier world in which they can retire.

The pension industry has a golden opportunity to drive faster decarbonisation, by investing in businesses that are serious about cutting their carbon emissions. 100% of our flagship growth funds are now invested in sustainable funds and we expect these investments to play a key role in achieving our 2040 net zero target.”

Fiona Smith, Investment Proposition Manager at Smart Pension, commented:

“We’re delighted to be launching our three new growth funds and proud to be the first pension provider in the UK to offer a choice of growth funds and lifestyle strategies that are 100% invested in sustainable funds and at different price points. These funds include allocations to climate-aware strategies and impact investments, such as renewable energy projects, clean water and healthcare. They continue to put Smart Pension at the forefront of the industry from a sustainability perspective."

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Notes to Editors

‍1. Smart Pension’s fully sustainable investment funds

Smart Sustainable Growth Core Fund – Typical AMC 0.25%

Aims to take advantage of Environmental, Social and Governance factors by investing more in companies which score well in these areas. This fund has the lowest fund cost of these growth funds.

Smart Sustainable Growth Fund –Typical AMC 0.30%

As above, and aims to benefit people and the planet by having a moderate allocation to investments contributing to solutions for environmental and social issues.

Smart Sustainable Growth Plus Fund – Typical AMC 0.50%

As above, and aims to benefit people and the planet by having a high allocation to investments contributing to solutions for environmental and social issues. This fund has the highest fund cost of these growth funds.

2. Smart Pension and sustainability – a timeline

January 2023 – Becomes the first UK pension provider to offer full sustainability across all lifestyle strategies, including the Smart Pension default growth fund.

December 2022 – Announced Smart Pension’s first green bond investment through the Mirova Global Green Bond Fund.

October 2022 – Announced that the Smart Pension default growth fund now invests fully in funds that promote good Environmental, Social and Governance (ESG) corporate activities.

September 2022 – Launched a biodiversity partnership with AXA Investment Managers with the aim of bolstering Smart Pension’s investments into decarbonisation and companies that are addressing biodiversity loss.

June 2022 – Announced that the Smart Pension default growth fund will be net zero by 2040, and is currently on track to have cut the fund’s emissions by 50% between 2019 and 2025.

October 2021 – Signed up to the Institutional Investors Group on Climate Change and committed to the Impact Investing Institute’s Impact Investing Principles, to develop investment offerings with the need to tackle climate change in mind.

March 2021 – Smart Pension Master Trust invests in a private credit fund whose investment decisions are grounded in ESG principles, providing rare access to this asset class in DC pension schemes.

February 2021 – Partnered with Make My Money Matter to commit to net zero and take action against climate change.