Responsible investment

We aim to be responsible investors of our members’ assets and believe that investment decisions should reflect environmental, social and governance considerations

Policy on responsible investment

‘Responsible investment’ covers just about anything that presents a major opportunity – or a genuine threat – to members’ interests that we should identify, understand and evaluate.

Climate change

Our climate change policy looks at the risks that climate change poses to the value of our members’ pension pots.

Investment principles

Our statement of investment principles explains the responsibilities of our Trustee in investing your pension savings.

Tell us what you think

We believe that investment decisions should reflect environmental, social and governance (ESG) considerations. We value what our members think and would love to hear your thoughts – the results will feed into our ESG approach, which will be published next year.

Our investment approach

The People’s Pension has a logical, straightforward approach to investment. Our approach allows us to balance the complexity of managing risk and generating investment performance, with a simple and effective presentation of facts and choices to members.

Most members are invested in our default option – the ‘balanced’ investment profile. We’ve carefully thought through this investment profile to ensure it delivers an appropriate pension savings solution for members at different stages of their careers. Read more about our default option and investment choices for members.

The Trustee of The People’s Pension has a duty to our members to make decisions that are most likely to improve returns. They’re responsible for setting the investment strategy and governing the Scheme’s investment in line with its ‘Statement of Investment Principles’ (SIP).

The day-to-day management of the investments has been delegated by the Trustee to a professional investment manager, State Street Global Advisors Limited (SSGA). SSGA, which is regulated by the Financial Conduct Authority (FCA) in the United Kingdom, manages the investments within the restrictions set out in the investment management agreement.

Responsible investment & environmental, social and governance issues

‘Responsible investment’ covers just about anything that presents a major opportunity – or a genuine threat – to members’ interests that we should identify, understand and evaluate.

The Trustee has set an investment strategy in the interests of members and consider environmental, social and governance (ESG) issues where they’re material to those interests. We allocate an appropriate amount of time to assessing these issues and to the systematic, fact-based analysis that enables us to make high-quality decisions.

For us, responsible investment means using 3 tools:

  1. Invest: Construct portfolios to reflect ESG factors that could positively or negatively affect investment returns.
  2. Exclude: Remove companies from investment portfolios that do not meet certain minimum ethical criteria. Likewise, include companies and investments that are likely to have a positive impact on the wider society.
  3. Engage: Work with companies in an investment portfolio about the issues that are likely to have a material impact (both positive and negative) on future returns.
Infographic visualising the Invest Exclude Engage responsible investment tools

For more details on our decision-making process, download our policy on responsible investment.


“Essentially, we invest if we believe it will add value. We exclude if we believe that it would not damage members’ portfolio and engage with the companies that remain in the portfolio.”

Nico Aspinall, Chief Investment Officer at B&CE (provider of The People’s Pension)

How we engage

Having a global diversified portfolio allows us to promote change in a wide range of companies. This enables us to use our voting powers, and engage with the boards and management on responsible investment issues across many sectors and markets.

We expect and require our fund managers to vote and engage with companies across global markets to protect and promote good standards and practice, including addressing ESG concerns.

When choosing investment managers to partner with, we ensure that the managers are:

The People’s Pension Trustee has access to regular reports from our core investment manager, SSGA, on how they vote and engage with the companies we invest in through them.

Our core investment manager

SSGA has detailed UK proxy voting and engagement guidelines that address many areas including:

  • Board structure
  • Audit-related issues
  • Capital structure
  • Remuneration
  • Environmental
  • Social
  • Other governance-related issues

More about SSGA on their website

Shariah fund manager

The B&CE Shariah Fund is managed by HSBC.

More about HSBC and responsible investing on their website

Moving in the right direction

It’s important to continually reassess and adapt our investment strategy.

Data availability changes all the time, along with the views of the market and the social and economic environment. This leads to the priority of different issues rising and falling, and some issues even get resolved over time.

Informed by your priorities – our responsible investment survey

We ask our members ‘which issues are most important to you for The People’s Pension to take into consideration when making decisions about where to invest your money?’. This helps to influence the order and priority of our research. So far, climate change comes out top…

In our 2019 customer satisfaction survey1, members on the phone told us which issues are most important to them:

  1. Climate change (56%)
  2. Data security (40%)
  3. Pay inequality (40%)
  4. Sustainable land use (30%)
  5. Packaging and waste (25%)

1 The People’s Pension member satisfaction survey July-September 2019 results weighted to represent total membership base.

And so far, those who’ve completed our online responsible investment survey2 have told us:

  1. Climate change (77%)
  2. Controversial weapons (34%)
  3. Sustainable land use (34%)
  4. Packaging and waste (32%)
  5. Tax avoidance (29%)

2 The People’s Pension online responsible investment survey results so far as at 12 October 2020 (survey is currently ongoing since July 2019).

Climate change – moving towards net zero investments

Our aim, by the mid-2020s, is to move future contributions into investments that have net zero greenhouse gas emissions. Our approach is aligned to the current scientific consensus that we should be limiting global warming to less than 1.5°C (compared to pre-industrial levels).

As a first step, our investment profiles (‘balanced’, ‘cautious’ or ‘adventurous’) began allocating money to the Multi-Factor ESG Low Carbon fund – this group of companies has at least half the carbon intensity and half the amount of fossil fuels owned, compared to the global market. It also has an improved ESG score and excludes companies involved in very severe ESG controversies or controversial weapons business.

How does climate change affect pension pots?

Pension savings are invested in companies to benefit from their success in the future. Climate change poses several risks to the success of these companies and therefore the value of pension pots.

The future value of a company that’s invested in today may be affected positively or negatively by:

  • changes in the weather (physical risk)
  • shifting to a low carbon economy (transition risk)
  • legal action being taken against those that have not done enough (liability risk).

Our climate change policy

Our climate change policy looks at the risks that climate change poses to the value of our members’ pension pots and how their pension savings are invested. Our policy discusses what climate change risks are, why they’re being prioritised, and what we’re planning to do about them.

What’s next?

We’re always thinking about the future. So, later this year, we’ll be evaluating the changes that we’ve made over the past year, particularly in relation to climate change.

We’ll continually analyse all the data available to us, including the results of our responsible investment survey, to help us choose what to focus on next.

Investing your pension

We invest your money to give it a better chance of being worth more in the long run.

Our investment funds

Read about our investment funds and compare their past performances.

Investment downloads

Download our fund factsheets, Statement of Investment Principles and more.