Our Impact and Fossil Fuel Free plans are both types of responsible pension plans. They’ve been created to enable savers like you to use your pension to invest in building a better world.
Customer feedback continually shapes how we do things here at PensionBee and we’ve heard from some customers who wanted a plan with a more proactive approach to addressing the world’s great social and environmental needs while saving for a happy retirement. So, the Impact Plan was created in collaboration with you, our customers, and designed for PensionBee by money manager BlackRock to help build the kind of world you’d like to retire into.
Since we announced the Impact Plan, we’ve seen great interest from our customers, many of whom have already committed to switching. However, we’ve also heard from some who’ve asked us what makes the Impact Plan different to our Fossil Fuel Free Plan.
There are many differences between the two but we wanted to highlight how the Impact Plan and Fossil Fuel Free Plan differ in their key features. Below you’ll find a table which provides a quick comparison. We hope it’ll help you see if switching to the Impact Plan’s right for you.
| Impact Plan | Fossil Fuel Free Plan | ||
|---|---|---|---|
| Investment manager | BlackRock | Legal & General | |
| Annual management fee |
0.95% | 0.75% | |
| Objective | Inclusion-focused with stringent exclusions Targets long-term total returns by only investing in companies whose core products and services are deemed to be addressing some of the world’s major social and environmental challenges and advancing the UN Sustainable Development Goals (UN SDGs) and targets. |
Exclusion-focused Replicates the performance of the FTSE TPI Global (ex Fossil Fuel) index. The index excludes companies with activities in relation to fossil fuels, tobacco and/or certain companies that don’t comply with UN Global Compact (UNGC) screening criteria. |
|
| Investment style |
Actively managed | Passive index tracking | |
| Type of investing |
Impact investing | Climate-aligned index | |
| Asset allocation | 100% equities | 100% equities | |
| Number of holdings | 200-300 | 1,475 | |
| Return profile | Objective is to outperform the MSCI ACWI over the long-term by 0-2% | Objective is to track the performance of the FTSE TPI Global (ex Fossil Fuel) index to within +/ 0.60% p.a. for two years out of three | |
| Measurable impact | Yes | No | |
| Considers social factors |
Yes | No | |
| Company alignment with UN Sustainable Development Goals | Yes | No | |
| Exclusions | |||
| UNGC violators | Yes | Yes | |
| MSCI orange flag controversies |
Yes | No | |
| MSCI red flag controversies | Yes | No | |
| MSCI CCC ESG scores | Yes | No | |
| Tobacco | Yes | Yes | |
| Fossil fuels | Yes | Yes | |
| Civilian firearms | Yes | No | |
| Controversial weapons | Yes | Yes |
Inclusion criteria
In addition to the above, our Impact and Fossil Fuel Free plans also differ in the criteria each uses to determine which companies your pension will invest in.
Impact Plan
The Impact Plan follows a rigorous five-step vetting process:
Alignment with impact theme
People
- Affordable housing
- Education and skilling
- Financial and digital inclusion
- Public health
- Safety and security
Planet
- Efficiency, electrification and digitisation
- Green energy
- Pollution remediation and prevention
- Sustainable food, water and waste
- Identification of a UN SDG target that the company’s product or service advances.
- Materiality measure to check more than 50% of revenue’s aligned to the impact theme or UN SDG.
- Additionality check to ensure the company is an agent of change or tackling an issue unaddressed by other actors
- Measureability of impact using best practice metrics such as IMP’s Five Dimensions of Impact and GIIN’s IRIS+ Core Metrics
Fossil Fuel Free Plan
- Constituents of FTSE TPI Global (ex Fossil Fuels) Equity Index
Switching to the Impact Plan
The Impact Plan’s a great opportunity to use your pension for impact investing, which is typically closed to mainstream pension savers. Our newest Impact Plan enables you to save for a happy retirement whilst investing in the kind of world you’d like to retire into.
Many of our customers have already switched to the Impact Plan. If you’d like to make the switch too, simply log in to your BeeHive and follow the banner on your home screen to get started.
Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
