Smart Pension, an online pension provider, has announced its goal to transition its default fund to "net-zero" by 2040 by increasing its investments in companies working to increase energy efficiency, accelerate the transition from fossil fuels, and create a more circular economy.

The online pension service announced the new objective and revealed a plan to halve its emissions by 2025 yesterday.

Smart Pension, whose assets grew by 2,000% in December and totalled £2.2 billion, reported that it was now "far ahead" of reaching its Paris Agreement commitments.

Head of investment proposition James Lawrence explained: "We're always reviewing our investments and looking to the future at how we can commit even more to innovative sustainable funds that benefit society and the environment, whilst also providing strong outcomes for our members."

Smart Pension indicated it would seek to invest in more companies "innovating for good" in the future, including those aiming to increase energy efficiency, develop sustainable agriculture, shift away from fossil fuels, and recycle materials.

Members of the default fund will now have a broader selection of investments based on the amount of environmental responsibility they deem most appropriate for their funds.

"We know that our members are increasingly looking at what their pension savings are doing as they accumulate," said managing director Paul Bucksey.

"Although sustainable investments can be more expensive than more traditional investments, a key advantage of having a very clean and efficient platform is that we can keep our admin costs low, allowing us to spend more on higher-quality, ESG-friendly investments without increasing member charges."

Source: Business Green

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