Aegon is investing £3bn of its default funds into a range of ESG index funds launched by BlackRock.
The firms worked together on the iShares range, which includes six ESG equity income index funds which track Morningstar’s regional and country-specific indices.
The change means that ESG exposure in the Aegon workplace default fund will double to 60 per cent for investors in the growth stage of their retirement savings, and to 40 per cent for those in retirement.
A number of other Aegon default funds will also use the new BlackRock vehicles.
The indices target a 30 per cent reduction in carbon emissions intensity, and apply exclusions to certain sectors such as tobacco, nuclear weapons, alcohol, porn and gambling.
Tim Orton, managing director, investment solutions at Aegon, said the group is keen to be responsible not only to customers but to the wider community.
However, he said Aegon is using the broad ESG moniker, because creating funds with more specific environmental, social or governance aims can be more expensive for customers.
“What we’re able to do with BlackRock is to incorporate these better, stronger characteristics but without changing any [of the] price to consumers,” he said.
He added that the term ESG is familiar to certain sections of the group’s customer base, which is why it has chosen to use it.
“The key is trying to keep it simple for customers,” he said, adding that it is sometimes equally as helpful to use tangible examples for investors to highlight the impact the funds have.
Sarah Melvin, head of UK at BlackRock, said the new range will help pension savers incorporate sustainable considerations into their retirement portfolios as they look to secure their financial futures.
“We continue to work with clients to help them navigate the energy transition and offer them more choice when seeking to implement their sustainability goals.”
sally.hickey@ft.com
