Now Pensions has announced a new investment strategy with a greater focus on environmental, social and governance (ESG) issues, targeting higher growth and increased green and sustainable investments, as part of its commitment to reach net zero by 2050.

The pension provider has also committed to supporting a 50 per cent reduction in emissions by 2030, and will be expanding its investments in sustainable bonds and sustainable equities to at least 50 per cent of the portfolio’s net asset value by the end of 2021.

This is expected to see members’ funds invested in an equity fund that invests in companies with stronger sustainability characteristics and lower carbon footprints.

Consistent with the provider’s commitment to invest in line with the Paris Climate Agreement to limit warming to 1.5 degrees above pre-industrial levels, Now has also increased its allocation to green and social bonds and has invested in a low carbon ESG equity portfolio.

Furthermore, the trustee and investment manager are considering an “additional innovative sustainability mandate” with greater focus on environmental and social solutions that will deliver the higher return objective.

Commenting on the plans, Now Pensions chair of the trustee, Joanne Segars, said: “The changes announced to our investment strategy demonstrate our commitment to sustainability and responsible investment which targets having over 50 per cent of the net assets value of the portfolio aligned to the trustee’s ESG principles by the end of 2021.

"I am delighted, too, that the trust has committed to reach net zero by 2050, with an interim target of 2030. We believe the focus on ESG supports better long-term financial outcomes for our members in later life.

“Our investment approach – centred around a single default fund – is focused around the needs of our members, providing returns to deliver good member outcomes, while also providing protection from market volatility as they approach retirement.”

Now CEO, Patrick Luthi, added: “Now Pensions strives to invest sustainably and we continue to monitor ways to be more effective and operate in a way that has a positive effect on our employees, our industry and our society. These changes put sustainability firmly at the heart of our investment strategy.

“We believe that financial services should improve our quality of life and will continue to highlight inequalities and fight for a fairer UK pension system to deliver the best retirement outcomes for our members.”

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