Ethical Investing  

L&G launches ethical fund for pensions

L&G launches ethical fund for pensions

Legal & General has launched a Future World Multi-Asset fund, designed for defined contribution schemes that wish to go further in integrating environmental, social and corporate governance (ESG) factors into their investment strategy. 

The fund will primarily hold L&G Future World ESG index funds, which incorporate environmental, social and corporate governance considerations.

It will incorporate LGIM's Climate Impact Pledge, focused on speeding up the progress companies are making in addressing climate change and transitioning to a low-carbon economy.

Emma Douglas, head of defined contribution at LGIM, said: "We have seen a marked change in attitudes from savers who want to use their pension to help create the future they want to retire in and research has shown that 85 per cent of millenials would like their future investments to reflect their social and environmental values.

"Through the launch of the Future World MAF, LGIM has created a fund that can be used as a default for DC schemes.

"This fund demonstrates our established expertise in environmental, social and corporate governance.

"The methodology behind this fund is closely linked with how we hold companies to account through engagement and voting at LGIM."

The fund targets a rate of return more conservative than that of developed-market equities over the long term, with two thirds the volatility.

John Morris, managing director of Bromley-based financial adviser Harvest Partnership, which concentrates mainly on Christian clients, said few of his clients were that interested in ethical investment, but he agreed that the younger generation tended to be more interested.

Mr Morris said: "Those who are interested in ethical investment tend to be very, very interested but it has come as a surprise to me that more clients aren't."

His colleague, Bonnie Stevens, said that fund providers had really stepped up to meet demand for this type of fund in the last five years, and there was now a good selection.

rosie.murray-west@ft.com