Announced yesterday, the insurance, pensions and asset management firm’s net zero target covers its core business as well as financed emissions for its workplace default pension funds.

Aegon UK also promised to take “concrete short-term steps” to slash its emissions in half by 2030, which it said would “support making customers’ investments more resilient to shocks”.

Crucially, moreover, the firm said it would invest £500m per year in climate solutions by 2026 through its default funds, with an intention to increase the figure over time.

“Climate solutions are investments that positively contribute to climate change,” the firm explained. “Both decarbonising funds and direct investment in climate solutions are needed to credibly fight climate change, as per industry guidance.”

The global company – which boasts some 29 million customers and almost €750bn in annual investments – said it was “clear the world is not on track” to meet the temperature thresholds of the Paris Agreement, and that climate change was a major concern for its customers.

A survey of its customers carried out by the firm found two-thirds were concerned about droughts and wildfires, deforestation and high temperatures, it said.

Chief investment officer Tim Orton said climate action failure “is the biggest challenge facing our planet today”.

“We have a responsibility to use our size and resources to help address this challenge,” he said. “Our climate roadmap shows how Aegon UK is embracing change to success in the net zero transition, starting with our default funds. I hope being transparent about our climate targets and progress will inspire others to do the same and increase accountability across the pensions industry.”

Head of responsible investing Hilkka Komulainen added: “The global economy is at an inflection point, and as one of the UK’s largest pension providers, we must do what we can to mitigate the systemic portfolio risks of climate change. Protecting our customers from the worst effects of climate change requires urgent action, and I am especially proud of our short-term targets and commitment to taking action now.”

Tony Burdon, CEO of Make My Money Matter – the group campaigning for a greener pensions and investments industry – welcomed Aegon UK’s commitments.

“We want to see the whole pensions industry step up and address the major climate risks and opportunities that we face,” he added.