Making an impact – understanding our impact investment promises

In July 2022, we began to invest around £75million in ‘impact investments’. This means that, over the next few years, a small proportion of your pension savings will now be invested in funds that drive social and environmental change.

TPT is committed to being a responsible investor and impact investing is part of that wider commitment. Responsible investment means that we consider environmental, social and governance factors within our investment strategies and ownership practices. We believe that including these factors in decisions improves the way we manage risk and can increase the amount of money you receive in later life. Importantly it can also mean that your savings can make a positive difference to the world you and future generations retire in.

What is impact investing?

Investing with impact means putting money into projects that are specifically designed to generate positive social and environmental benefits. For instance, typical impact investments include things like social housing or building solar farms. There are several benefits to impact investing. These include good risk management and governance, and improving the world around us, while importantly, still generating a return on investment.

How is my money being invested?

At the moment, just a small proportion of your savings is placed in impact investment funds. For instance, for the vast majority of our members whose savings are in one of our default Target Date Funds (TDFs), we’re currently investing 1-2% of your assets in impact investments.

This includes investments in renewable infrastructure. For instance, we invest in assets such as an offshore wind farm located in the North Sea, where your savings are helping to re-power the wind turbines and increase electricity generation.

Our specialist investment team is looking for opportunities to increase the proportion of our default funds invested in impact projects to up to 5%. This won’t happen overnight; we anticipate that it will take us up to two years to find the right opportunities.

That’s because, even though our impact investments are specifically chosen to have a positive social and/or environmental impact, the investment returns they can provide are still our priority. Each opportunity is very carefully considered to ensure that it will generate the right level of financial performance.

When correctly managed, impact investing offers a ‘win-win’ scenario. It provides a financial return for members and also enables the economy to innovate and grow. This innovation means more sustainable investments which can improve society and public services at large.

Our focus is on finding opportunities to invest in across three key areas. These are:

1. Healthcare – projects focused on traditional healthcare, but also wellness initiatives such as quitting smoking, weight loss, personal healthcare products, household products
2. Climate – projects focused on climate change, water usage, sanitation
3. Empowerment – projects that empower parts of society (poorer countries, LGBTQ+ community etc)

We chose these areas because we believe they can provide healthy returns and positive change.

What do I need to do?

You don’t need to do anything to take advantage of our new impact investments. Your savings are being carefully managed in line with our new approach.

However, you should always check your savings regularly and think about your future plans by logging on to your Retirement Savings Account.