Articles - PPF Publishes Third TCFD Report

The Pension Protection Fund (PPF) has today published its third annual Climate Change report, disclosing the climate-related risks and opportunities in its investment approach, with an aim to build understanding of the impact climate change has on the Fund. The report was produced to progress transparency of climate-related financial information. This includes reporting the risks and opportunities presented by rising temperatures, climate-related policy, and emerging technologies in the changing world.

 The report shares progress and activities in measuring and managing climate-related risks and opportunities and key metrics.

 • Key highlights include:
 11% of the Fund now allocated to investments categorised as "Aligned" with Net Zero (up from 4% in 2020 baseline assessment)
 The percentage of Equities portfolio allocated to companies who have set or committed to a science-based target increased by a third to 43% from 2021
 100% of electricity supply for its offices backed by renewable UK sources
 59% reduction in energy consumption from its data centres

 The report builds on the progress and ambition outlined in the PPF’s sustainability strategy which aims to help “catalyse the growth of a more sustainable pensions industry.”

 Having achieved Net Zero for Scope 1 and Scope 2 market-based emissions for its direct operations and seeing a 34 per cent reduction in its Scope 2 location-based emissions from its baseline, the PPF will aim to reach Net Zero in its operational supply chain by 2035 or sooner.

 Claire Curtin, Head of ESG and Sustainability, said: “Addressing the risks and opportunities arising from climate change is key to our responsible investment and organisational goals. We believe placing sustainability at the heart of our activities is essential to mitigating some of the material ESG risks we face. Our Climate Change report helps to build understanding of our strategy and demonstrates how the PPF is trying to use its influence as a force for good.”

 The report details the PPF’s progress in achieving more high-quality disclosure from issuers, deepening climate management beyond listed equities and driving better alignment with the goals of the Paris Agreement. Highlights include 84 per cent of portfolio companies in the PPF’s Climate Watchlist now reporting carbon emissions data, and 37 per cent of private companies reporting ESG data through a Private Markets ESG reporting pilot.

 The PPF recently published its Sustainability Strategy, which brings together key elements of the way it approaches responsible investment, Diversity & Inclusion and community impact, as well as considering how to reduce its own operational impacts. The strategy is underpinned by the Five Capitals framework for sustainability, the PPF’s organisational values and an assessment of its most material ESG risks as a business.

 Claire Curtin added: “We have set ourselves high standards on climate change and responsible investment. Our target is to reach Net Zero for our operations by 2035 or sooner. For our investments, we seek to contribute to the global transition to Net Zero through our portfolio and engagement activities. In the past two years, we’ve gathered climate assessments across every investment in the Fund so we can see how the Fund’s position aligns to Net Zero and the Paris Agreement. We’ve continually evolved this to reflect new methodologies for different asset classes and changes in our portfolios.”

 In 2022 the PPF was recognised for its efforts to be a leading responsible investor and the progress it has made to improve access to ESG-related data, advance ESG practices among our external managers and support opportunities to deploy capital for positive social and environmental impact.

 PPF Third Annual Climate Change Report

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