The People’s Pension newly invests in fund combining ESG and factors to reduce fossil fuel exposure
The People’s Pension1, a leading not-for-profit master trust in the UK, has this week invested in the State Street2 ACS Multi-Factor Global ESG Equity Index Fund, in order to reduce exposure to ESG factors including fossil fuels, as part of its wider work on responsible investment.
The fund, which targets the MSCI3 World Select 5-Factor ESG Low Carbon Target, has a blend of smart beta factors and ESG characteristics. It targets five well-established equity factors, improved ESG scores and a reduction in carbon emissions and reserves intensity.
Commenting, Nico Aspinall, Chief Investment Officer at B&CE, provider of The People’s Pension, said:
“Factors offer a different way of constructing portfolios for members and we expect it will reduce the risk of our holdings overall whilst achieving their targets. We also recognise the importance of ESG as a financial factor and the screen we apply keeps the worst companies out of the portfolio, reducing fossil fuel exposures as a result.”
Guido Giese, Executive Director of MSCI, added:
“Institutional investors are increasingly seeking to incorporate ESG considerations into factors. This Index aims to incorporate ESG-based and carbon-based constraints in a bottom-up index construction approach.”
Daniel Leuty, UK Head of DC Clients and Financial Institutions at State Street, said:
“The launch of the State Street ACS Multi-Factor Global ESG Equity Index Fund continues to build on our belief and commitment to ESG and factor investing and delivering these capabilities to our clients and the wider market. State Street and The People’s Pension are fully aligned in the belief that climate change presents material, uncompensated risks to long-term investors, and this strategy was designed to protect and benefit the portfolio over the long-term.”
Notes to editors:
- The People’s Pension is a leading not-for-profit master trust in the UK, provided by B&CE, with more than 4m members from more than 80,000 employers, and £5bn assets under management (AUM) (as of 12 December 2018).
- For four decades, State Street Global Advisors (SSGA) has served the world’s governments, institutions and financial advisors. With a rigorous, risk-aware approach built on research, analysis and market-tested experience, it builds from a breadth of active and index strategies to create cost-effective solutions. As stewards, SSGA help portfolio companies see that what is fair for people and sustainable for the planet can deliver long-term performance. As a result, SSGA has become the world’s third largest asset manager with nearly US $2.81 trillion under its care.
- For more than 40 years, MSCI’s research-based indexes and analytics have helped the world’s leading investors build and manage better portfolios. Clients rely on their offerings for deeper insights into the drivers of performance and risk in their portfolios, broad asset class coverage and innovative research. Their line of products and services includes indexes, analytical models, data, real estate benchmarks and ESG research. MSCI serves 99 of the top 100 largest money managers, according to the most recent P&I ranking. For more information, visit www.msci.com.