The Co-op pension fund is investing approximately £300m into companies that score highly for sustainability and with an emphasis on mitigating climate change and / or managing their own carbon footprint.
The trustees of Pace, the Co-op’s £11bn pension scheme, which comprises both Defined Benefit (DB) and Defined Contribution (DC) elements, have chosen the LGIM Future World Multi-Asset as the default fund for the DC scheme.
This means approximately £290m out of Co-op employees’ £315m defined contribution assets will be invested in companies and bonds that score heavily when it comes to environmental, social and corporate governance performance.
Gary Dewin, Director of Pensions, at the Co-op said: “In making this decision the Trustees were keen to provide a default fund for Co-op colleagues with a proven investment track record, but which also aligns with the Co-op’s own sustainability agenda and ethos.”
Emma Douglas, Head of DC at Legal & General Investment Management (LGIM), said: “We are delighted that the Co-op pension scheme has chosen the LGIM Future World Multi-Asset Fund as the default fund for its DC scheme.
“This Fund incorporates environmental, social and governance (ESG) considerations into the underlying indices used to construct the fund. We’re seeing increased demand from pension scheme members for investments which are aligned to their values – for example a recent survey we commissioned found that almost 60% of scheme members said it was important that fund managers actively consider ESG issues such as climate change, levels of diversity and executive pay when choosing the companies in which to invest their money.”
Recently and in response to the housing crisis, the Pace trustees set aside £50m of DB assets to invest in high quality affordable housing as part of an inflation linked property mandate managed on their behalf by PGIM Real Estate.