The NPT, XPS Pensions Group’s mater trust offering, oversees the savings of 44,000 members, representing around £978m in assets.
The new ESG oriented default arrangement strategy will focus specifically on climate change and the transition to a low carbon economy. It is hoped that by shifting the strategy to an ESG based approach, it will increase emphasis on sustainability. Additionally, members’ savings will be invested in a manner that will support the sustainable goals set out by the United Nations.
The new investment strategy will see NPT collaborate with Legal & General Investment Management, the Transition Pathway Initiative (TPI) and State Street Global Advisors (SSGA) to ensure its investment portfolio is aligned with the climate goals set out in the Paris Agreement.
NPT head Paul Armitage said: “Climate change poses a real risk to our future, which is why we want to make the way we invest assets more sustainable. That is why we have selected the TPI as it achieves our initial goals for reduce carbon exposure today, but also incentivises a transition to future lower carbon intensity for businesses around the world by allocating capital to those firms that do it best.”
NPT chair of trustees Ian Davies added: “Developing our new default fund is an important step for the NPT. It is another example of how we’re committed to providing market leading investment strategies investment strategies that reflects the preferences of our members while helping employers meet their ESG responsibilities.”
SSGA head of UK institutional distribution Alistair Byrne added: “UK pension schemes are actively seeking to provide their members with exposure to the investment opportunities generated by the transition a low-carbon economy. This strategy offers an efficient index-based solution, enabling them to improve their portfolio’s carbon profile and reduce climate risk, while maintaining target returns.”
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