Aegon UK has launched its ‘Climate Roadmap’, which sets out how the firm plans to reduce the carbon footprint of its investments and support its customers’ financial wellbeing in relation to climate change.

The roadmap sets out Aegon’s plans to reach net-zero greenhouse gas emissions by 2050 across its workplace default funds, including short-term emission reduction targets.

Alongside the decarbonisation of its default funds’ portfolio, the company has also announced a commitment to invest £500m in climate solutions by 2026, with plans to increase this commitment over time.

Aegon stated that both decarbonising funds and direct investment in climate solutions were needed to credibly fight climate change.

It argued that the world was not on track to meet the goals of the Paris Agreement, noting that its annual responsible investment customer panel agreed climate change was an important risk when investing.

Three-quarters of the panel felt climate change was an important risk when investing, with around two-thirds of those surveyed concerned about droughts and wildfires, deforestation, and high temperatures.

“Climate action failure is the biggest challenge facing our planet today,” Aegon UK chief investment officer, Tim Orton.

“We have a responsibility to use our size and resources to help address this challenge. Our Climate Roadmap shows how Aegon UK is embracing change to succeed in the net-zero transition, starting with our default funds.

“I hope that being transparent about our climate targets and progress will inspire others to do the same and increase accountability across the pensions industry.”

Aegon UK head of responsible investing, Hilkka Komulainen, added: “The global economy is at an inflection point, and as one of the UK’s largest pension providers, we must do what we can to mitigate the systemic portfolio risks of climate change.

“I am delighted to be publishing Aegon UK’s first Climate Roadmap. Protecting our customers from the worst effects of climate change requires urgent action, and I am especially proud of our short-term targets and commitment to taking action now.”

The firm stated that it believed engagement was a key tool to drive the systemic changes needed to fight climate change an evolve economies.

Its roadmap outlines how it plans to engage with customers, asset managers, policymakers and industry groups.

Commenting on the announcement, Make My Money Matter chief executive officer, Tony Burdon, said: “More climate action is urgently required from the finance industry.

“The time for clear plans and action is now, as further down the line could be too late. We are therefore pleased to see that Aegon UK is making positive strides in this direction and is setting out its Climate Roadmap to drive change.

“We want to see the whole pensions industry step up and address the major climate risks and opportunities that we face.”

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