25 June 2021
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3 min read
Royal London manages around £148bn of assets
Pension and investments giant also takes aim at halving CO2 across its multi-billion pound portfolio by 2030
Royal London has committed to at least halving CO2 emissions across its entire investment portfolio by the end of the decade, and to achieve net zero financed emissions by 2050, it announced yesterday.
The pension provider - one of the largest in the UK, boasting around £148bn managed assets - said customer money could play a "significant part" in helping society transition to a sustainable world and that customer research had shown growing public concern about climate change as a key theme.
In addition, Royal London plans to develop climate solutions to enable its customers to directly invest in the low carbon transition, as well as working with others in the pensions sector "to provoke action at the scale and pace needed" to overcome the challenges of delivering a net zero industry.
The firm is also calling on regulators to consider climate change alongside product outcomes, and for the government to "promote policies that reward those who act responsibly and do the right thing", it said.
"Our population is living longer, and, unlike previous generations, we must take responsibility for funding our later lives ourselves," said Royal London group chief executive Barry O'Dwyer. "This coincides with a climate crisis that is damaging the world into which we will all retire. In combination, these ultimately put the standard of living we have come to expect in jeopardy; this is not the time to be passive. The biggest way Royal London can make a difference in the fight against climate change is through an active investment approach. We are engaging with the largest carbon emitters in our investment portfolio to influence their behaviours."
Royal London is already part of both the Net Zero Asset Management Initiative and the Institutional Investors Group on Climate Change's Net Zero Asset Owner initiative.
"We all want to spend our lives in a climate where our homes aren't put at risk by extreme weather events and we have access to sustainable sources of food," O'Dwyer added. "Customers' money must be invested responsibly in a way that supports the changes needed to protect the planet."
Royal London's net zero pledge just the latest in a rapidly growing number of climate announcements from leading pension providers in recent months. Just this week Cardano and Now Pensions announced 2050 net zero goals, which followed a similar pledge last week from the United Nations Joint Staff Pension Fund also set a 2050 net-zero target. They all join a string of schemes and master trusts seeking to limit the impact of their investments on the climate, including the Environment Agency Pension Fund.
Make My Money Matter (MMMM) - a campaign pushing for a more climate-friendly pensions industry - last week wrote to leading pension providers calling on them for "ambitious robust net zero commitments". Tony Burdon, chief executive of MMMM, therefore welcomed Royal London's announcement yesterday.
"We're delighted that Royal London has responded to this call, and announced a new climate approach which ensures that millions of UK pensions will be helping tackle the climate emergency, rather than fuelling the fire," he said. "Royal London's net zero commitment is a critical step, and one which we believe all pension providers must take ahead of COP26. In doing this, Royal London align themselves to the 1.5C ambition of the Paris climate Agreement, and will help ensure that our pension power is used to build a world that UK savers actually want to retire in to."
A version of this article originally appeared at Professional Pensions.
