Workplace pension scheme The People’s Pension has removed investment in companies worth up to GBP226 million from its funds because these businesses have failed to meet its rigorous ESG (environmental, social and governance) standards.
The workplace pension scheme has worked closely with its fund manager, State Street Global Advisors (SSGA), on the policy which led to the initial removal of approximately 150 stocks from its portfolio.
The divestment targets controversial weapons companies as well as organisations linked to severe controversies involving human rights, labour, environment, and corruption. Such companies are deemed to present some of the most severe types of ESG-related investment risk.
Jon Cunliffe, managing director of investments at B&CE, provider of The People’s Pension, says: “We’ve taken the significant step of divesting from companies which fail to meet our ESG standards because of the risks they pose to member accounts and the reputation of the scheme.
“We have removed investments from these holdings, in the best interest of our members, as engagement with companies which flagrantly breach good practice is unlikely to work.
“Both SSGA and our Trustees have worked very hard to get to this point, and we know that this decisive action will have the support of our members as our polling tells us that responsible investment is important to them.
“These exclusions underline our commitment to being a responsible investor, which we put at the heart of our decision making.”
Alistair Byrne, managing director, head of retirement strategy at State Street Global Advisors, says: “ESG considerations are an increasingly crucial aspect of the investment strategy of any pension scheme. We are delighted to have been able to work with The People’s Pension to design and implement these changes, creating a more robust and sustainable default fund for their millions of members. We look forward to continuing our collaboration to evolve the ESG strategy of the scheme.”
