Phoenix Group has a plan to move £15 billion ($18 billion) of its assets into new sustainable strategies by the end of 2022.
The pensions company explained its Sustainable Multi Asset Solutions will provide increased exposure to equities with ESG components. This could be as high as 80% of overall assets, depending on the strategy applied.
It hopes that by seeking out responsible investment opportunities, the pensions administrator will see better growth outcomes earlier "leading to the prospect of improved retirement income over the long term".
The strategy takes on more ESG investment risk in the growth phase, gradually 'de-risking' over 15 years.
This move has seen Phoenix Group awarded the ESG initiative of the year (corporates) award, with judges praising it for delivering change at scale. They also said it was a "clever way of overcoming inertia among savers".
It made the decision to move funds following a customer survey which found 85% expected it to consider how responsible all of its investments are, not just those labelled as responsible or ESG.
It will be transitioning all of its Standard Life customers, Active Plus and Passive Plus customers to the more sustainable solution by the end of the year. Phoenix Group said: "We know the vast majority of our customers keep their money in a default pension option, so we are there transitioning our customers in existing default funds to a lower-cost sustainable solution, focused on growth and outcomes, without them or their employers having to take action."
Phoenix Group has about £310 billion of assets under administration.