Deloitte has introduced a new default pension fund focusing on sustainability for its £1bn (€1,7bn) pension scheme covering 35,000 members.

The move is part of the firm’s wider climate change and sustainability commitments, as set out in its WorldClimate strategy to drive responsible climate choices both inside and outside of our organisation, it said.

The firm’s workplace scheme, which is managed by Standard Life, will use the Aberdeen Standard Investments (ASI) Sustainable World Index Fund, which assesses investments across environmental, social and governance (ESG) factors.

Deloitte will be the largest investor moving assets into the fund, it added.

Any member not wishing to transfer their pension to the new fund will be able to explore several alternative options, Deloitte disclosed.

Stephen Griggs, Deloitte’s UK managing partner, said: “With the effects of climate change more urgent than ever, it’s important that we all – businesses and individuals alike – take action where we can. This change is a result of direct feedback from our people telling us that being a more sustainable firm matters to them.”

Wells Fargo sets up climate transition credit strat

Wells Fargo Asset Management (WFAM) has launched a Climate Transition Global Investment Grade Credit strategy which will help investors simultaneously achieve their climate and financial goals.

The strategy, which will focus on supporting the climate transition and the decarbonisation of the economy, is already being used by NEST, the UK’s master trust.

NEST converted its existing $2bn (€1.7bn) WFAM allocation to the new strategy earlier this year, in alignment with its climate policy.

The strategy’s portfolio management will be covered by WFAM’s global fixed income team.

Its specific objectives will focus on:

  • actively managing security selection to identify firms that are best placed and prepared to perform through the transition to a low/net-zero carbon world;
  • using exclusions in a targeted manner;
  • initially reducing weighted average carbon intensity to at least 30% below the benchmark;
  • decarbonising portfolios by 2050, if not before; and
  • engaging with issuers to enhance climate and financial performance.

Diandra Soobiah, head of responsible investment at NEST, said that WFAM’s new strategy provides the master trust with “a robust and measurable framework to decarbonise over time and support the climate transition, helping us to align our portfolio with our net zero ambitions”.

PLSA opens consultation on RI quality mark

The Pensions and Lifetime Savings Association (PLSA) has opened a consultation on a new Responsible Investment Quality Mark (RIQM), developed to recognise pension schemes that meet the highest standards for incorporating environmental, social and governance (ESG) factors across their operations.

The quality mark has been established amid “an evolving regulatory environment and a momentum shift in public and industry attitudes towards climate change and ESG”, the association stated.

Last year pension schemes were required for the first time to publish an implementation statement to disclose their voting behaviour and how they have delivered against their stewardship strategy.

From October 2021, scheme with assets over £5bn (€5.8bn) will be required to report against standards set by the Task Force on Climate-related Financial Disclosures (TCFD) on how they are considering the impact of climate risk on their investments.

Despite these regulatory changes, a survey of more than 2,000 UK adults commissioned by the PLSA last year found there remains a lack of understanding among savers as to how pension schemes are taking action against climate change.

The PLSA said the RIQM will provide:

  • a new standard to which schemes can aspire;
  • the opportunity to share best practice among schemes; and
  • a scheme member-focussed way to demonstrate activities in this area.

The proposed assessment process will require schemes to meet minimum standards across seven areas: understanding the needs and interests of their beneficiaries; governance; investment strategy; oversight of stewardship; risk management; the use of metrics and targets; and communication and engagement.

Against each of these areas, schemes will be required to provide supporting evidence.

The proposed standards and information about how to respond to the consultation, which closes on Friday 3 September, are available via the PLSA website.

The first global investor engagement coalition for a just transition is formed

Finance for Tomorrow has launched the Investors for a Just Transition – the first global investor engagement coalition for a just transition, it claimed.

The new coalition brings together asset managers and asset owners of the French financial arena along with corporates and it aims to promote a socially acceptable transition to low-carbon economies.

The founding members of the group will commit to engaging with companies, encouraging them to integrate the social aspects of the transition into their strategies and to highlight best practices within key industries.

Through this collaborative platform, investors will work with different stakeholders – companies, labour unions, universities and research institutes – to define a common strategy and specific engagement objectives.

Initiated by Finance for Tomorrow, the coalition currently represents €3.6trn and includes Amundi, Aviva France, AXA and AXA Investment Managers, Caisse des Dépôts, CNP Assurances, CPR Asset Management, Eiffel, ERAFP, La Banque Postale Asset Management, ODDO BHF Asset Management, Rothschild & Co Asset Management Europe, and SCOR Investment Partners among its founding members.

The coalition will have three main areas of action. First, members will engage with companies, thereby ensuring ongoing dialogue with coalition members on key themes of just transition.

The group will also partner with a leading French university or research institute to support a goal of knowledge sharing through the publication of research papers.

Finally, the Just Transition Hub will serve as an interactive tool enabling investors to assess the performance of companies on the social aspect of their transition.

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