ESG Investment Gets Major Boost from People's Pension

The UK's biggest commercial master trust, the People's Pension, has granted asset managers Amundi and Invesco £28 billion ($35.5 billion) of investment mandates to support the trust's push at driving sustainable and responsible investment approaches.

Amundi, the number one asset manager in Europe, will manage £20 billion of developed market passive equities. The investments will be aligned with climate-indexes that reflect The People's Pension's environmental, social, and governance (ESG) strategy. Invesco, on the other hand, will invest £8 billion of fixed income assets in global markets. The company will take net-zero alignment methods and actively engage with issuers to encourage sustainable business practices.

This is one of The People's Pension's wider moves towards a more sustainable investment strategy. Over the past few years, the trust has shifted £28 billion of assets into segregated mandates with custodian Northern Trust. This is intended to give more transparency, flexibility, and control over investment choices, while keeping ESG considerations at the center of asset management strategies.

Amundi’s passive equity portfolio will be structured into five regional segments covering major developed markets. The selection process was based on a balanced assessment of portfolio construction, risk management, and responsible investment capabilities. Invesco’s fixed-income mandate includes defined maturity buckets, which help optimize risk and liquidity management while leveraging the firm’s global expertise in fixed-income investments.

The Amundi and Invesco investment is another endorsement of The People's Pension's focus on combining strong financial returns with good asset ownership. Through partnerships with successful international asset managers, the trust aims to incorporate ESG factors into long-term investment, which will suit nearly seven million members.

This move is a sign that times are shifting when it comes to pension investing, with investment success increasingly reliant on the sustainability mandates. With increasing attention being paid to the role of ESG stewardship, The People's Pension is at the forefront of sustainable investment within the UK pension landscape.

Source: Original article on The People’s Pension investment mandate.