Aegon has partnered with HSBC Global Asset Management to add Environmental, Social and Governance (ESG) criteria across its in-house workplace default funds.
From January, Aegon Retirement Choices default funds will start to invest in the newly launched HSBC Developed World Sustainable Equity Index fund, reaching a total of around 30 per cent of assets for members in the growth stage within six months.
This forms part of Aegon’s longer-term plan to achieve net zero carbon emissions across its default fund ranges by 2050.
According to the provider, those nearing retirement and invested in the default fund will have 15 per cent invested in the ESG component at the end of the process, which will see around £1.7bn invested in the fund.
Aegon is the first investor in the fund, which is a low-cost solution designed to track the performance of the FTSE Developed ESG Low Carbon Select Index.
The fund excludes companies that operate in specific sectors, for example, weapons or tobacco production, or those that generate significant levels of revenue from activities such as thermal coal, gambling and adult entertainment.
Last year, Aegon added ESG to its LifePath default funds for Master Trust and TargetPlan clients.
The provider said its latest move means that both its workplace products now include a significant ESG allocation in their respective default funds.
Tim Orton, managing director for investment solutions at Aegon, said: “We’ve become increasingly aware of our customers’ desire to invest not just for their own future prosperity, but to also make an impact with it, and this is something that we also feel passionate about.
"HSBC Global Asset Management has strong credentials in sustainable investing, which was a key consideration for us when embarking on such an ambitious programme of change across our default range.”
Stuart White, UK and international CEO at HSBC Global Asset Management, said: “As the latest addition to our sustainable fund range, the HSBC Developed World Sustainable Equity Index Fund is ambitious in its approach as it focuses on not just one but three areas of improvement, allowing for the underweighting of less desirable stocks without excluding them entirely.
“This aligns with our approach of supporting companies as they transition to become more sustainable.”
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