Responsible and sustainable investing means investing with a long-term approach that benefits the environment and communities, and avoiding investments that may be considered harmful.
Our three priority sustainability themes are:
Climate action – a speedy and fair transition to a low-carbon economy is the only way to address the climate crisis.
Gender equality – everyone should have equal rights, responsibilities, and opportunities.
Living wages – all companies should pay their employees a living wage.
Climate change is widely recognised as a financial risk. Taking action to tackle climate change is increasingly the norm. At now:pensions, we’re committed to net zero greenhouse gas emissions by 2050, and reducing emissions to half of 2019 levels by 2030. This is in line with the Paris Climate Agreement goal of limiting global warming to 1.5°C.
The way we invest our members’ money can help to tackle climate change. We believe that a speedy and fair transition to a low-carbon economy is the only way to meet these targets and will produce the best long-term financial outcome for our members.
Our approach to climate action is to stay invested in companies that are willing to adapt and to engage with them to take action to meet climate targets. However, we’ll exclude investments if we think their impact is too damaging or their failure to change quickly enough is creating unacceptable financial risks.
While it doesn’t guarantee good performance in the short term, we believe companies that take steps to address and adapt to climate change will, on average, perform better over the long term than companies that ignore or worsen it.
This report sets out how we consider climate change-related risks and opportunities in the investments we manage on our members’ behalf.
Read the report
We believe we need gender equality for a prosperous and sustainable world. We believe everyone should be offered equal rights, responsibilities and opportunities.
When we’re investing our members’ money, we look at the steps companies are taking towards gender equality. It‘s not easy to connect a company’s financial performance to their gender equality efforts, but we believe companies that are taking steps to reduce inequality tend to perform better than companies that ignore or worsen it. These companies tend to:
We believe companies that perform strongly in these areas are likely to see improved investment performance over time.
We support companies that treat their workers fairly and pay them a living wage. This includes directly-employed workers, contractors, and supply chains. Paying a living wage can help to tackle inequality by, for example, reducing child labour and increasing access to education.
We believe companies that pay a living wage will, on average, perform better than companies that don’t pay a living wage. We believe companies that pay a living wage are, on average, more likely to:
The Trustee believes its approach to living wages and gender equality support each other.
Paying living wages reduces income inequality and strengthens social foundations. This can contribute to long-term economic growth by raising disposable incomes, enabling more saving, and increasing the amount of tax the government can raise, improving long-term financial outcomes for pension savers.
The UK Living Wage Foundation defines a living wage as ‘the wage rate necessary to ensure that households earn enough to reach a minimum acceptable living standard as defined by the public’.
In the UK, the minimum wage is set by government and known as the ‘national living wage’. The ‘real living wage’ is set by the UK Living Wage Foundation. This is the definition now:pensions uses when we’re measuring a company’s living wage efforts.
We monitor the risks and opportunities of living wages across our investments. A company’s financial performance can be affected by many things, but we believe that companies taking steps towards paying a living wage tend, on average, to perform better than those that ignore or worsen the issue.
Find out more about our research into underpensioned people.
You have a now:pensions account that you and your workplace put money into. Your money is invested in one of our investment options.
In the investment plans, the money is invested with the aim of helping it to grow then preparing it for retirement, including reducing investment risk.
We also offer a shariah equity fund. Unlike the investment plans, the shariah equity fund doesn’t move into investments designed to prepare your money for retirement, including reducing investment risk, as you near your planned retirement age.
The way your now:pensions account is invested depends on the following things.
The investment plans invest in different funds. The funds can invest in different assets such as equities (shares in companies), bonds (loans to companies or governments, with a promise to repay the loan plus interest at a later date), and other assets like cash and commodities (gold and industrial metals, for example). Learn more about our funds.
The value of your now:pensions account when you reach your planned retirement age will depend on a number of things.
When you join now:pensions, your savings are invested in our lump sum plan. You stay in the lump sum plan if you don’t choose anything else. So if you’re sure you’ve never chosen another investment option, you’ll be in the lump sum plan.
To check which plan you’re in, log in to now:u and go to Investment. You’ll see the plan you’re currently invested in.
Log in to now:u and go to Investments.
Your investment plan shows the plan your pension savings are currently invested in.
Below this you can see:
Choose See details to look at:
See about our investment funds for more information.
It’s impossible to say. Investment values can’t be guaranteed. But you can check regularly how your investments are doing by logging in to now:u and going to Investment.
The value of your investments can go down as well as up. Past performance doesn’t mean future performance will be the same.
now:pensions can’t give you investment advice. If you’re not sure if a plan or fund is right for you, it’s a good idea to talk to a financial adviser who’s regulated by the Financial Conduct Authority (FCA). Learn more here.
