Green bonds – making sustainable investments

Investing £1.9bn of our members’ pension savings is a great responsibility, and our first priority is obviously to deliver a good return over the long term. But we want to do that in a responsible way, thinking about the impact our investments – and your savings – have on both the environment and society.

To make sure we invest for good, we work hard to balance the need for strong long-term returns with making responsible and sustainable investments.  One example of this in practice is our investment in green bonds.   

Green bonds allow us, on your behalf, to support initiatives designed to have a positive impact on society. We currently invest around £200m in these bonds which finance climate-related and environmental projects helping us to transition to a low-carbon economy. These include funding for energy-efficient transport projects such as railways and wind farms. 

Green energy sources

The bonds are typically issued by governments, and organisations such as the European Investment Bank which funds various projects around the world.  One example is the Galloper Wind Farm (GWF) which lies off the Suffolk coast.  GWF was built to generate enough green electricity to power the equivalent of more than 380,000 British homes each year and it’s just one of the important projects which is helping the UK in its shift away from energy consumption through non-renewable sources. 

This will not only help the UK reach its environmental impact targets but will also lead to benefits ranging from economic opportunities to large-scale reductions in the emissions associated with global climate change. 

Our focus on responsible investment is allowing us to identify more opportunities which we’ll be integrating into our funds.  We’ll be making further announcements about these in the coming months, as we continue to ensure that we invest members’ money in a responsible way. 

Rob Booth, Director of Investment and Product Development