We’ve published our first ‘Climate change report’!
Members have contacted us to say that they are interested in ‘green’ issues. Well, I am pleased to advise that the Trustees published their first ‘Climate change report’ at the beginning of this month.
Background to the reporting
The UK is the first G20 country to make it mandatory for its largest companies and financial organisations to disclose their climate-related risks and opportunities. This is part of the government’s commitment to make the UK financial system the greenest in the world.
The Climate change report gives members the opportunity to find out more about the work carried out by the Trustees in relation to climate change and its potential impact on members’ pensions savings.
The Trustees will be issuing Climate change reports annually; they welcome any feedback.
Summary of the report
The key areas addressed in the report are; Governance, Strategy and Risk management, Climate Scenario Analysis, and Metrics & Targets.
1. Governance The Trustees have a robust framework for managing the Plan, including setting clear expectations and responsibilities in relation to climate change:
- A climate governance statement defines the responsibilities of everyone involved,
- Climate-related risks and opportunities are reviewed regularly in light of the Trustees’ beliefs, and
- The Plan’s asset managers and advisers support the Trustees on climate-related matters.
2. Strategy and Risk management The Trustees have taken steps to understand how climate change might affect the Plan’s investments and to control the risks that they have identified. Based on the analysis carried out, the Trustees expect climate change to potentially impact the Plan more significantly over the longer term. The Trustees plan to reduce the risks to the P:lan in several ways, including:
- Significantly reducing the Plan’s carbon intensity through its investments, where possible,
- Investing responsibly, in line with the Trustees’ beliefs,
- Regularly reviewing the Plan’s investment managers’ climate practices, and
- Using the Plan’s influence as an investor to encourage climate action.
3. Metrics and Target The Trustees have collected and reviewed information about the greenhouse gas emissions and carbon footprint of the assets that the Plan invests in. This analysis helps the Trustees to understand the Plan’s exposure to climate risks:
- Collected and reviewed greenhouse gas emissions data for the Plan’s investments, and
- Reported the proportion of investments with no data.
The “Paris Agreement” is a key international treaty on climate change which was adopted in 2015. The Trustees have set themselves a target to increase the percentage equities & bonds they hold with companies that have committed to reduce their carbon emissions in line with what climate science deems necessary to meet the goals of the Paris Agreement from the current level of 20% to 35% by 30 September 2027.
Where to find out more
You can read the full report here.
All the best, Tim
(Tim Spriddell, Trustee Executive)