Smart Pension has committed a £330m investment into two funds managed by Octopus Energy, marking an early success for the Chancellor's Mansion House Accord as it backs a South West green tech firm's net zero project in South Wales.
The pension firm, boasting over £7bn in assets under management, said this commitment will account for 5% of its default fund portfolio. This forms a significant part of its goal to allocate at least 15% to private markets.
The Mansion House Accord, a pact made between some of the Ƶ's largest pension funds back in May, included a promise to invest at least 10 per cent of pension funds into private markets, with at least half of this being Ƶ-related, as reported by .
Chancellor Rachel Reeves said: "Our reforms are about unlocking investment to deliver higher returns for savers, drive growth, and create good jobs. This means more money in the pockets of working people, our Plan for Change in action."
Octopus Energy's head of renewables hailed the £330m boost from Smart Pension as a significant step towards accelerating the Ƶ's journey to Net Zero, Zoisa North-Bond, CEO of Octopus Energy Generation, said the deal "creates real, tangible change for communities and speeds up the Ƶ's journey to net zero".
Smart Pension views Octopus Energy Generation – which part-owns heat pump technology manufacturer Kensa – as a pathway to secure "strong, sustainable returns" for its customers.
This agreement means Cornwall-based Kensa is set to establish an investor-funded source heat pump network in South Wales – a first for the Ƶ. Kensa said: "The project will provide affordable renewable heating and hot water to 114 new homes at Parc Eirin and position ground source heat pump networks as an investable low-carbon utility. The homes will be part of the new generation of housing developments built without gas as the Ƶ moves toward net zero."
Smart Pension's director of investment proposition, James Lawrence, expressed confidence in the deal's long-term benefits, stating it will "deliver measurable environmental and social impact for years to come".
He added: "From renewable surplus power generation to support local leisure facilities, to cutting-edge clean tech like heat pumps, these are the kinds of investments that not only align with our own ethical standards, but also help members feel a deeper connection to their pension savings."
Ms North-Bond reflected on the significance of the agreement, noting that it "brings everything full circle", as "the very money people are saving for retirement is helping to build the smarter, carbon-free energy system they'll rely on in years to come".
Tamsin Lishman, CEO at Kensa, said: “As pioneers in ground source heat pump technology, we are proud of our role in delivering the switch to better, more affordable heating and hot water, powered by ultra-efficient, ground source heat pumps designed and made here in the Ƶ.
"The Parc Eirin investment demonstrates the transformative role private funding will play in helping both housebuilders and homeowners transition to effective, low-carbon heat – the critical next frontier in the Ƶ for carbon reduction, which currently contributes around 13% of national greenhouse gas emissions.
“The investments made by Smart and Octopus Energy Generation are encouraging for the Ƶ’s ever-growing renewables sector. They will support the Ƶ’s Net Zero goals, generate growth, and provide more well-paid green sector jobs.”
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