ESG: Investing for good
ESG: Investing for good
Environmental, Social and Governance factors (ESG for short) are an important consideration for pension schemes. We want to make sure your money is responsibly invested and enable you to feel good about where it’s going.
Environmental factors encompass how well nature is maintained and protected. This includes managing climate change risks, biodiversity, resource scarcity and waste management.
Social factors examine business relationships with employees, suppliers, customers and the communities where they operate. This includes labour policies and relations, product liability (including cyber security), controversial sourcing and social impact reporting.
Governance factors examine the internal business practices, governance, and procedures that companies adopt to govern themselves. This includes how decisions are made and their effectiveness, how companies comply with the law, and how the needs of external stakeholders are met.
Several of our funds have an ESG focus. The ‘growth’ phase of the Aon Managed Retirement Pathway Fund, which is where your contributions are invested if you don’t self-select, is currently 60% invested in ESG-specific funds. This is set to increase to 80% in February, with the addition of a new underlying fund, which aims to reduce carbon emissions in a way that aligns with certain of the UN’s Sustainable Development Goals and excludes coal, tobacco and controversial weapons. It also has a particular focus on sustainable investing, which includes things like green technology, affordable housing, and education and healthcare for poorer parts of the world.
If you particularly want to invest your pension savings with an ESG focus, you can select your own funds. The Aon Managed Global Impact Fund is available for this purpose. If you’d like to understand more about investment in general, including the full range of options available to you as a Plan member, we’ve recently updated our Investment Guide and fund factsheets.
Any Plan investment decisions are underpinned by the Trustee’s Statement of Investment Principles and Implementation Statement – important documents that set out our approach to investment more broadly, including ESG considerations. You can read both documents here.
And remember: you can check and change your investments any time by logging on to the member portal.