Lifesight, Willis Towers Watson’s defined contribution master trust, has announced that it is targeting at least a 50% reduction in greenhouse gas emissions across its default funds by 2030, and net-zero by 2050 at the latest.
Its default investment strategies represent the vast majority of its total assets under management, currently over £10bn (€11.6bn), it said.
Craig Baker, WTW’s global chief investment officer, said that as fiduciary manager of LifeSight’s defaults, WTW would aim to ensure the principles followed, and measures used to assess progress, were consistent with the IIGCC’s net-zero investment framework.
“We believe that working to achieve net zero by 2050 in LifeSight’s defaults under our fiduciary mandate is completely consistent with the financial goals of LifeSight, and its members, as climate change has the potential to impact returns across multiple asset classes,” he said.
“Being strategically ahead of a net zero transition will, in our opinion, significantly improve risk-adjusted returns. The actions already implemented in LifeSight’s defaults are consistent with this multi-year journey to net zero.”
Jane Platt, LifeSight’s chair of trustees, said the master trust had a responsibility “to help shape the system and contribute to stewarding a whole economy transition to a net-zero and resilient future for the long term financial benefit of our members”.
The master trust said it had in July introduced a new climate-focussed fund following feedback from member surveys. It said the fund would have a low carbon footprint, generally exclude fossil fuels, and emphasise investment in companies with lower carbon footprints, those transitioning their emissions to be aligned with the Paris Agreement and those providing solutions to climate and other environmental challenges.
“It will also take a broader lens to environmental issues, such as waste, pollution, water use and biodiversity, in addition to emissions,” LifeSight said.
The fund could invest in fossil fuels if these represent a small part of overall revenues for a company and the overall business is helping to solve environmental challenges.
The master trust has also partnered with an engagement overlay provider to deliver additional stewardship services, including daily engagement on a variety of environmental, social and governance issues.