Smart Pension, one of the UK’s workplace pension providers, has announced that its default growth fund will be net zero by 2040, and will have halved its emissions between 2019 and 2025.

This is well ahead of the goals of the Paris Agreement, which called for emissions to be reduced by 45% by 2030 and to reach net zero by 2050.

Much of Smart Pension’s default growth fund – which its emissions are already reduced by 40% since 2019 – is already invested in companies with a strong focus on ESG, the provider stated.

Going forward, the fund will invest even more into companies that are innovating for good. This includes those working to improve energy efficiency, transition from fossil fuels, create sustainable agriculture, and reuse materials, it added.

Smart Pension, which manages more than £2bn (€2.3bn) in assets on behalf of more than 900,000 UK savers, will also give members an increased choice of investments based on how sustainable they want their pension to be.

A sustainability hub has been launched on Smart Pension’s website providing full details of its journey towards net zero.

Paul Bucksey, managing director at Smart Pension, said: “Although sustainable investments can be more expensive than more traditional investments, a key advantage of having a very clean and efficient platform is that we can keep our admin costs low, allowing us to spend more on higher-quality, ESG-friendly investments without increasing member charges.”

RisCura research shows stewardship in China advancing rapidly

The findings of a research study – Moving the needle - stewardship in China – conducted by RisCura have shown that stewardship practices in China are progressing rapidly.

The research, which looked at a cross-section of asset managers in China serving both domestic and global clients, aimed to assess and broaden the understanding of stewardship practices in the country.

Malcolm Fair, managing director of RisCura, said: “China is the world’s second largest equity market, yet the perception of risk and the nuances of investing there have meant it has often been shunned by global institutional investors.”

He said RisCura had been following and researching the Chinese market for many years, both as an investor and an allocator, and “realised that the understanding of local corporate engagement practices was poorly understood by most global investors”.

Lars Hagenbuch, investment consultant at RisCura, added: “Although the basic corporate governance framework in China is very similar to the West, capital market regulation and best practices are still developing, especially when it comes to stewardship and ESG.”

RisCura’s research revealed that over the past five years there had been a “paradigm shift in the right direction”, he said.

“We found that local managers are realistic about their current stewardship activities and were eager to learn from RisCura’s research process about global best practice and what global institutional investors would want to see,” Hagenbuch noted.

Fair added: “During our follow-up interviews we found local managers very engaging on what they have found to work or where the roadblocks are with regards engagement on ESG issues with local corporates. Stewardship practices are alive and burgeoning in China, the needle is moving and there are encouraging findings for a market that has become too significant to ignore.”

Principles announce key publications in support of market transparency

A group of principles including the Green Bond Principles (GBP), Social Bond Principles (SBP), Sustainability Bond Guidelines (SBG) and Sustainability-Linked Bond Principles (SLBP) – the global standard for a $2.4trn market, representing the largest source of market finance dedicated to sustainability and climate transition available internationally to corporates, banks and sovereigns – have announced new and updated publications including new definitions for green securitisation, updated key performance indicators for sustainability-linked bonds and new resources for climate transition finance.

Specific publications and resources released today include:

  • new definitions for green securitisation clarifying terminology and market practice, notably for collateral;
  • an updated registry of approximately 300 key performance indicators for sustainability-linked bonds;
  • a new Climate Transition Finance (CTF) Methodologies registry has been created with a list of tools to specifically help issuers, investors, or financial intermediaries validate their emission reduction trajectories/pathways as “science-based”.

The standards and guidance from the principles are developed with the input of over 400 market participants and stakeholders, as well as the participation of many other organisations through technical working groups.

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