PensionBee has announced a partnership with Legal & General Investment Management to offer an environmentally-friendly pension plan.
As both an online pension provider and manager, the PensionBee platform allows customers to bring old pensions under one plan and manage them like a bank account.
Once combined, customers can choose how to invest those pensions as part of a styled portfolio with one of three major money management firms: BlackRock, State Street and now, Legal & General.
Aptly named the PensionBee Future World Plan, the new venture into ethical investment reduces investors’ exposure to carbon-intensive companies and replaces them with companies that favour low-carbon activity, without sacrificing returns.
It replaces the previous ‘Match’ plan from PensionBee, which sought to provide customers with medium-risk investments based on the broader pensions industry.
Utilising the Legal & General Future World Fund, the updated plan is an alternative index tracker that includes companies based on four measures: value, quality, low volatility and size, as well as in their average carbon contribution.
The fund manager itself actively engages with companies that it invests in to drive them towards increasing sustainable activity. This makes it a natural ally to the ideals of PensionBee, which also publishes rankings of current pension providers on fairness.
Today’s announcement coincides with the publication of data from a recent YouGov poll which shows that millennials are twice as likely to back ethical investments in their pensions than older generations.
However, concern for the environment and making ethical choices for future generations seems to be gaining in popularity, and not just among young people.
Internal data from PensionBee indicated that 20 per cent of its existing customer base, which sits at an average age of 38, intend to switch to the new plan.
Romi Savova, CEO of PensionBee, commented: “In finance, investing green is more popular than ever. Introducing our new Future World Plan provides the powerful message that polluting companies have to step up their game, and move to a low-carbon economy.”
The challenge then remains for the rest of the investment community to keep up, and understand how to cater to this new socially and environmentally-conscious demographic.
You can learn more about PensionBee by tuning into Episode 17 of our podcast, Millennial Money Matters.