Aegon UK has moved more than £5 billion of customer money into ESG investment strategies as part of its wider drive to reach net carbon zero by 2050 and halve carbon emissions by 2030.
By the end of June, Aegon plans to transition a further £3.5 billion, bringing the total to over £8.5 billion.
Aegon said the next stage of its transition programme will be achieved by moving around 25% of its Universal Balanced Collection and its lifestyle fund variants into ESG strategies. The Universal Balanced Fund is Aegon’s largest default fund.
As a result of Aegon’s changes, over two thirds (68%) of its TargetPlan LifePath default funds for growth stage savers are invested in ESG screened index funds from BlackRock.
In addition, key workplace ARC default funds, including the in-house Aegon Workplace Default fund, have around a 30% allocation for growth stage investors to the HSBC Developed World Sustainable Equity Index fund.
Aegon said there is increasing expectation among customers that their savings be invested in more sustainable ways, with over three quarters (77%) agreeing that climate change is an important risk to consider when investing for the future.
Tim Orton, managing director for Investment Solutions at Aegon, says: “Action is needed now to make a difference to the future world we will live in. We’re committed that our longer-term targets, such as our 2050 commitment to net zero carbon emissions, are accompanied by actions now in the drive towards it. I’m delighted we’ve hit our first milestone and reached £5bn of our Pension scheme assets transitioned to lower carbon ESG strategies.
“£14 billion was paid into defined contribution pension schemes in 2019 making them a major source of investment. The scale of the assets involved means pension providers have a real opportunity to make a difference and to invest in a way that will help create a lower carbon future. We want to continue to lead the way on this.”