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Aegon shifts Retirement fund investments in net zero carbon bid

25 January 2021

Aegon has partnered with HSBC Global Asset Management to embed environmental, social and governance (ESG) criteria across its in-house workplace default range.

From this month, key ARC workplace default funds will start to invest in the newly launched HSBC Developed World Sustainable Equity Index fund, with the aim of reaching a total of 30% of assets for members in the growth stage within six months.

This latest move marks part of Aegon’s intention to achieve net zero carbon emissions across its default fund ranges by 2050.

The provider said that individuals nearing retirement and invested in the Aegon Workplace Default Retirement fund will have 15% invested in the ESG component at the end of the process, which will see around £1.7 billion invested in the new fund.

The fund targets three areas of improvement with the investments it makes – a 20% uplift in ESG score as well as a 50% carbon emissions and fossil fuel reserves intensity reduction. It excludes companies that operate in sectors such as weapons and tobacco production, or those that generate significant levels of revenue from activities such as thermal coal, gambling and adult entertainment.

This latest announcement follows the addition of ESG to its LifePath default funds for Master Trust and TargetPlan customers last year.

Tim Orton, managing director for investment solutions, Aegon, said: “We’ve become increasingly aware of our customers’ desire to invest not just for their own future prosperity, but to also make an impact with it, and this is something that we also feel passionate about. HSBC Global Asset Management has strong credentials in sustainable investing, which was a key consideration for us when embarking on such an ambitious programme of change across our default range. We are pleased to be partnering with HSBC Global Asset Management in this initiative as we continue to improve our range of sustainable and ethical solutions to meet our customers’ needs.”

Stuart White, UK and international CEO, HSBC Global Asset Management, added: “The transition to a lower-carbon economy is underway and our priority is to develop solutions that will enable our clients to participate in this transition. Our partnership with Aegon UK is an important milestone in achieving this goal and testament to our expertise in responsible investing.

“As the latest addition to our sustainable fund range, the HSBC Developed World Sustainable Equity Index Fund is ambitious in its approach as it focuses on not just one but three areas of improvement, allowing for the underweighting of less desirable stocks without excluding them entirely. This aligns with our approach of supporting companies as they transition to become more sustainable.”

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