Workers' funds of LifeSight are invested to the tune of $1 billion into climate transition initiatives
In a significant move towards sustainable finance, LifeSight, a leading defined contribution master trust, has announced its investment of approximately £1bn in Willis Towers Watson's Climate Transition Index (CTI) fund. This investment, made on Finance Day of the COP26 Climate Summit in Glasgow, marks a crucial step in LifeSight's journey towards achieving net zero emissions across its default investment portfolios.
Fiona Matthews, Managing Director of LifeSight, stated, "This investment in the CTI fund is the next stage in LifeSight's journey to reaching net zero emissions across its default investment portfolios."
The CTI fund, which tracks a forward-looking, bottom-up evaluation of transition risk and opportunity for each company, uses Willis Towers Watson's Climate Transition Value at Risk (CTVaR) methodology. This approach allows for the analysis of the impact that moving to a low-carbon economy will have on projected company cash flow.
Craig Baker, Global Chief Investment Officer of Willis Towers Watson, praised the investment, saying, "This is a great example of investing in the Environmental, Social, and Governance (ESG) space in a way that has a clear financial case."
The CTI fund aligns strategically with the global push for decarbonization and sustainable finance, which can support growth opportunities. However, it's important to note that there is no direct guarantee or certainty that the fund will produce profits specifically earmarked or sufficient to cover pension holders' future heating bills. The fund’s performance will be influenced by broader market and climate-related factors over time.
LifeSight was the first master trust to embed ESG into its default investment strategies and has committed to targeting net zero greenhouse gas emissions across all of its default funds by 2050, with a 50% reduction by 2030, in line with the Paris agreement. This commitment covers all LifeSight's defaults, which represent the vast majority of its total assets under management, currently over £11bn.
The investment by LifeSight and other Willis Towers Watson clients will amount to approximately £1bn by the end of 2021. This investment is part of Willis Towers Watson's plan to advise clients on climate change policies due to the increasing need in the industry.
The acquisition of Acclimatise, a market leader in climate change adaptation advisory and analytics services, is aimed at expanding the scope of Willis Towers Watson's Climate and Resilience Hub (CRH). This move demonstrates Willis Towers Watson's commitment to helping businesses navigate the challenges and opportunities presented by climate change.
John Haley, CEO of Willis Towers Watson, announced the investment in the CTI fund, stating, "LifeSight, our defined contribution master trust, is investing nearly £1bn in our Climate Transition Index (CTI) fund." Haley is due to speak on the COP26 summit stage with CoP26 President Alok Sharma.
The bulk annuity market is expected to return to 'normal' levels in 2020, with £30bn worth of deals anticipated, down from an anticipated £40bn in 2019. This development, along with the significant investment in the CTI fund, underscores Willis Towers Watson's commitment to sustainable finance and its role in shaping the future of the industry.
[1] Willis Towers Watson (2021). Willis Towers Watson Climate Transition Index (CTI) Fund. Retrieved from https://www.willistowerswatson.com/en/insights/2021/10/willis-towers-watson-climate-transition-index-cti-fund
[4] Willis Towers Watson (2020). Total Portfolio Approach. Retrieved from https://www.willistowerswatson.com/en/insights/2020/06/total-portfolio-approach
- LifeSight's investment of approximately £1bn in Willis Towers Watson's Climate Transition Index (CTI) fund, made on Finance Day of the COP26 Climate Summit, is a crucial step towards the master trust achieving net zero emissions across its default investment portfolios.
- The CTI fund, which uses Willis Towers Watson's Climate Transition Value at Risk (CTVaR) methodology, aligns strategically with the global push for decarbonization and sustainable finance, and will be invested in by LifeSight and other Willis Towers Watson clients amounting to approximately £1bn by the end of 2021.
- In addition to the CTI fund, Willis Towers Watson has announced the acquisition of Acclimatise, a market leader in climate change adaptation advisory and analytics services, to expand the scope of its Climate and Resilience Hub (CRH).
- The CTI fund, which tracks a forward-looking, bottom-up evaluation of transition risk and opportunity for companies, is an example of investing in the Environmental, Social, and Governance (ESG) space with a clear financial case, as praised by Craig Baker, Global Chief Investment Officer of Willis Towers Watson.
