Cushon Sustainable Investment Strategy

75% of your pot is invested into stocks and shares of companies from around the world, in the Sustainable True Index managed by Macquarie. Your investments are spread across many regions and sectors, including familiar US technology giants like Apple, Microsoft and Alphabet, to some companies closer to home, like AstraZeneca and Tesco. 

We co-designed this index ourselves by starting with a universe of over 3,000 companies, and excluding those that were not sufficiently aligned with the United Nations Sustainable Development Goals (UN SDGs). Roughly half of the companies did not meet our criteria, meaning our bespoke index consists of around 1,600 companies, favouring companies with green revenues, and away from carbon intensive companies. The index has an ongoing 7% emissions reduction target per year going forwards. 

Despite having a much lower emission intensity, our index still tracks the performance of the FTSE All World extremely closely. We expect this outperformance to grow over time as the world transitions towards Net Zero. 

We are proud of our latest investment into the Schroder’s Climate+ Long Term Asset Fund. Private markets are the opposite of public markets, since these assets are not traded on an exchange like global equities and bonds are. Instead, private markets unlock opportunities into new kinds of investment, and this fund has a primary focus on funding climate solutions close to home.   

Up to 15% of pension savings finance 1) building wind, solar and sustainable farming infrastructure across the UK; 2) building low-cost social housing across the UK; 3) restoration of UK forests using sustainable forestry; and 4) investing in upcoming, cutting-edge clean technology companies across the globe.  

10% of your pension pot is invested in global bonds. Instead of buying shares in a company, purchasing a company’s bonds means you are essentially giving them a loan. That entitles you to the principal (the amount loaned) and interest payments on that loan in return. Bonds are considered a lower risk, but also a lower return asset class compared to global equities. We spread your money so it’s not concentrated in a single type of investment. 
 
We work closely with four different investment funds to manage our global bond portfolio: 
 
NinetyOne Total Return Credit - 3.2%: This dynamic multi-asset credit strategy is designed to adapt to ever-changing market conditions. During uncertain times, it takes a defensive approach to protect your investments by lending to well-established companies with strong credit ratings. In more favourable market conditions, the strategy may shift to lending to growing, less mature companies, with the aim to capture a higher return on investment. The strategy is targeting at least 50% to be loaned to debtors that are achieving net zero, aligned to a net zero pathway, or aligning to a net zero pathway by 2030. 
 
Wellington Global Impact Bond Fund – 2.5%: This is an impact fund, meaning investments are made with the intention to generate a positive, measurable social and environmental impact, alongside a financial return. The fund invests primarily in investment grade (safer) bonds, funding companies who seek to make a positive impact on themes such as clean water and sanitation, education and job training, and alternative energy. 

Lombard Odier TargetNetZero Corporate Bond Fund – 2.5%: We recognise that decarbonising your portfolio does not necessarily lead to emission reductions in the real world; just because we are avoiding investing in high-emitting companies does not mean other investors will. To ensure we are creating a positive impact on real world decarbonisation, this fund aims to invest in companies which can contribute to a reduction in global carbon emissions and the eventual achievement of net zero carbon emissions by 2050. The fund targets companies that do not necessarily have low emissions today, but have credible decarbonisation strategies, and aims to assist them transition to a net zero world.  
 
LGIM Future World GBP Corporate Bond Fund – 1.8%: The fund employs an index tracking strategy, aiming to replicate the performance of the Solactive L&G ESG GBP Investment Grade Corporate TR Index. The index aims to provide exposure to the GBP corporate bond markets while reflecting significant environmental, social and corporate governance (ESG) issues.