A pension that’s good for saver… and society

A leading UK pension provider is launching a new plan that allows clients to invest their pension funds exclusively in companies that have a positive impact on the planet and society.

PensionBee’s new Impact Plan, starting tomorrow, will invest in companies that address challenges such as better healthcare, education and cleaner energy.

The fund’s top holdings include US biopharmaceutical company Royalty Pharma, energy management company Schneider Electric and Danish renewable energy company Vestas.

The investments are selected by fund managers at BlackRock, based on PensionBee’s strict criteria. The fund will contain some 200 to 300 investments, which PensionBee hopes will be enough to provide a globally diversified portfolio. The annual costs are 0.95 percent.

Once existing clients have pledged to invest £50m in the fund, it will be made available to the general public.

Interest in investing to make a positive impact has grown rapidly in recent years, but still only represents less than one per cent of UK investor funds.

Most pension providers now offer fund options labeled ‘ethical’, ‘green’, ‘sustainable’ or with a focus on environmental, social and governance (ESG) issues.

In practice, however, many of these funds simply screen companies they believe are causing harm, such as those that make a profit from gambling, alcohol or weapons production. Few funds are full of companies actively trying to do good.

Clare Reilly, PensionBee’s chief engagement officer, says: ‘Our clients tell us that the planet and society they retire to is just as important as their retirement pot.

“They want to invest outside the same range of stocks in the companies of tomorrow, which are already making a measurable and tangible positive impact on the planet.”

No less than 68 percent of British savers say they want to take people and the environment into account in their investments in addition to profit.