As interest in sustainable investing grows, so do options for investors. This includes pension plans that are aligned to making a positive impact on society and the environment. Along with our Shariah Plan, we’re introducing a new sustainable investing option - the Climate Plan - which is launching to new customers from January 2025. It’s an upgraded sustainable plan that reflects our customers’ views and invests in climate solution providers.
Read on to find out the Climate Plan.
The Climate Plan at a glance
| The Climate Plan | |
|---|---|
| Description | Focused on an accelerated decarbonisation pathway, to capture the financial opportunities associated with net zero. |
| Money manager | State Street Global Advisors |
| Objective | Targets a yearly minimum 10% emissions reduction to achieve net zero emissions in the portfolio by 2050. It does this by selling high carbon emitting companies and investing more in low carbon emitters and green revenues over time. It’s focused on emissions reduction of the plan over time and is agnostic to sector or social outcomes beyond the set of baseline exclusions. |
| Investment style | Paris-Aligned index tracking (passively managed). |
| Fee | 0.75% |
| Asset allocation | 100% equity |
| Number of holdings | 800 |
| Voting Choice | Yes |
| Measurable impact | No |
| Considers social factors | No |
Objectives and investment focus
The Climate Plan is designed to achieve net zero emissions by 2050 through an accelerated decarbonisation strategy. The plan’s objective is to align with the goals of the Paris Agreement to keep the rise in global surface temperature well below 2°C above pre-industrial levels. It does this by continually reducing the total intensity of the GreenHouse Gas (GHG) emissions produced by companies in the plan by at least 10% each year. So, even if the global economy uses more carbon over time, the Climate Plan will move in the opposite direction, always using less.
Management style and fees
The Climate Plan’s money manager is State Street Global Advisors. The plan follows a passive, index-tracking approach that’s aligned with the Paris Agreement. The plan uses a Paris-Aligned Benchmark (PAB) that dictates its investment choices.
The plan’s benchmark is the MSCI ACWI Climate Paris Aligned ex Fossil Fuels & BISR Custom Index (GBP). This Index helps investors reduce their exposure to climate risks and transition to a low-carbon economy. It’s designed to align with the Paris Agreement’s goal of limiting global temperature rise to 1.5°C.
Holdings and fees
The plan invests in more than 800 publicly listed companies globally. These are actively reducing their carbon emissions and leading the transition to a low-carbon economy.
The annual fee for the plan is 0.75%. We halve that fee on the portion of your pension balance over £100,000.
Investing in a sustainable pension plan puts you at the forefront of the transition to a low carbon economy and enables you to invest in the change you wish to see in the world.
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.
