Phoenix Launches ESG DC Default Solution

Phoenix Group​, one of the UK’s largest long-term savings and retirement businesses, has launched a new ESG DC Default solution for pension fund clients of its Standard Life Assurance business, and their scheme members.

The new passive ESG Default will launch mid-December 2020 and will be a multi-asset, diversified solution with Environmental, Social and Governance (ESG) fund components for key asset classes. Its launch follows on from the expansion earlier this year of the range of self-select responsible investment funds available to workplace scheme members. This range now totals 12 funds and there are plans in place to expand it further.

Responsible investment is a core part of Phoenix Group’s overall sustainability strategy. Phoenix and its asset management partners have been taking fundamental ESG factors into consideration when making investment decisions for many years. This launch has been driven forward by the Group’s passion for responsible investment and a growing demand from workplace clients, their advisers, trustees and scheme members for an ESG Default solution. The launch also highlights Phoenix’s ongoing investment in what is important to its growing Workplace business operating under the Standard Life brand.

The new Standard Life Sustainable Multi Asset ESG Default solution will aim to achieve good member outcomes in retirement, and will blend three responsible investment approaches - Screening, Tilting and Stewardship. It will focus on ESG factors that mitigate “financially material risks”, while seeking to improve sustainability outcomes at a portfolio level.

From 1 October 2019, Trustees have had a statutory obligation to specify their policies in relation to “financially material considerations” including those involving the ESG factors taken into account in the selection, retention and realisation of investments**.

Commenting, Gareth Trainor, Head of Investment Solutions, says: “Responsible investment is a central consideration in all the workplace pension solutions we offer. But we’re delighted we will be launching our new more focused ESG default for DC pension clients and their members before the end of the year. The demands placed on scheme default solutions continue to evolve. While delivering good member outcomes, value and rigorous governance is vital, responsible investment considerations have also become important to scheme members, policymakers and regulators alike. Our new ESG Default solution meets this demand. It’s a flexible solution, ultimately designed to provide good member outcomes by thinking more holistically about risks and opportunities.”