Aviva UK has come up with a new workplace pension default investment strategy, called ‘Stewardship lifestyle strategy’, which is claimed to incorporate ethical and also environmental, social and governance (ESG) considerations.

Two women working in workplace

Image: Aviva UK launches Stewardship lifestyle strategy. Photo: courtesy of Aviva.

According to Aviva UK, this is the first time a strategy has been totally based on the Aviva Stewardship funds.

The insurer said that the new strategy covers ethical and ESG considerations right across the growth and consolidation phases. Irrespective of when a first investment is made by a member, the considerations are integrated right till their selected retirement date, said the company.

Aviva workplace propositions head Matt McGill said: “Responsible investing is no longer a ‘nice to have’. The investment and workplace pensions industry can play a huge role in changing the world we live in for the better, and the launch of this lifestyle strategy, utilising the Stewardship funds, is a big step towards that.

“Aviva has been at the forefront of responsible investment for decades and we take our duty very seriously. We want to offer people a simple but effective way of ensuring that as they save for their retirement, their investment is being used for the good of society and the planet.”

The insurer said that the Stewardship Funds investment approach is based on three layers that are exclusion, engagement and outcome.

Exclusion will be based mainly on what a company does which means those with a significant involvement in tobacco, coal mining, pornography are excluded. As far as engagement, is concerned, the funds will work with firms to enhance how they conduct their business.

The third layer, which is outcome, measures the ESG performance of the firms in which the funds are invested.

Businesses that already have their workplace pension scheme with the insurance major in the UK can use the Stewardship lifestyle strategy as their default. Furthermore, the businesses will also be able to provide the strategy to employees as an alternative to their existing default.

Aviva Investors chief responsible investment officer Steve Waygood said: “Having the option to invest in companies that are in line with your personal beliefs shouldn’t be reserved for the wealthy or the investment professional.

“As a result of auto-enrolment and the boom in pension saving, more and more people are now investors. Their hard-earned savings can be used to make the world a better place.”