People's Pension to allocate £15bn into climate aware investment strategies

70% of default accumulations will be aligned to Paris Agreement goal of 1.5 °C by 2030

Jasmine Urquhart
clock • 1 min read
Dan Mikulskis: The changes will mean TPP is now "one of the greenest master trusts in the UK"
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Dan Mikulskis: The changes will mean TPP is now "one of the greenest master trusts in the UK"

The People’s Pension has announced it will allocate £15bn of its assets under management (AUM) into climate aware investment strategies.

The £25bn master trust, part of the People's Partnership, said the change will mean 70% of assets in the default global investments fund in the accumulation stage will be Paris-aligned to the goal of limiting temperature increases to 1.5°C by 2030.

The pension provider said its new strategy, which will mean divestment from companies that produce thermal coal, will reduce the carbon footprint of the majority of its 6.5m members (those within the default accumulation strategy) by 30%.

Initially, the strategy will reduce emissions by 30% in line with the EU's climate transition benchmark, and then by a further 7% each year to reach net zero by 2050.

The provider said its strategy aims to "manage the long-term risks" from climate change that may affect members outcomes, which "aren't currently being priced by the market".

People's Partnership chief investment officer Dan Mikulskis said the changes will mean the provider is now "one of the greenest master trusts in the UK" - highlighting the importance of asset owners with "size and influence" and using this to allocate members' savings in a responsible way, and to engage with investee companies.

"Key to our investment philosophy is conviction in what we do - if we really believe in something we want to make it core to our members' retirement savings, rather than a tick to a box, and that's what we've done here."

People's Pension Trustee chair Mark Condron said the change was a "significant moment" for the provider and its members, adding they can be "confident their savings are working towards achieving net zero targets and not against it".

Jasmine Urquhart
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Jasmine Urquhart

Senior Correspondent at Professional Pensions

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