Now Pensions has become one of the first master trusts to publish its Task Force on Climate-Related Financial Disclosures (TCFD) report.
This mandatory report, covering the period 1 October 2021 to 31 March 2022, compels providers to disclose key metrics regarding their carbon footprint, allowing members and advisers to compare the progress being made towards net zero targets.
Now Pensions has disclosed that the total emissions from its corporate equity exposure amounts to 164,700 tons of greenhouse gases (also know as a carbon dioxide equivalent). This amounts to a carbon footprint for its corporate equity exposure of 71.3 tons of greenhouse gas per million pounds invested.
It also revealed that 56 per cent of its investments have an explicit sustainability objective. This includes green and sustainable bonds, lower-carbon ESG-screened equities and environmentally-aware cash investments.
In its TCFD report, which is made available to all members, Now Pensions says it has invested in green, social, and sustainable bonds since 2017. The sustainable bonds, which total 13 per cent of its portfolio (as of 31 March 2022) finance a range of environmental projects, from solar and wind energy production to low-carbon transport and residential buildings.
It has also significantly increased its investment in sustainable equity. However Now Pensions says this does not mean it has disinvested from energy companies, companies with higher carbon footprints, or companies exposed to less desirable social issues. The provider says it invests in these companies on the basis that it expects their business models to change over time to become more sustainable. It says this processes is encouraged through engagement and stewardship initiatives run by Now Pensions and its investment manager Cardano.
Now says its investment strategy looks at a number of sustainability issues, the three most important being climate action, gender equality and living wages.
Now Pensions head of sustainability Will Martindale says: “In our TCFD report, we include three scenarios and report emissions metrics for Scopes 1, 2 and 3 emissions to give a full assessment of the climate change-related risks and opportunities across our portfolio.
“As well as managing risks, we believe we have a responsibility to take action to address climate change. We engage with companies in our portfolios with the aim of supporting them – and if necessary, requiring them – to transition to a lower-carbon business model. This stewardship is an important part of our strategy.”
Now pensions chair of trustees Joanne Segars says: “Climate change remains squarely at the top of our agenda. The climate crisis has profound implications for our savers. Left unchecked, runaway climate change will lead to substantial financial, environmental, and social consequences.
“To help us manage climate change-related risks and opportunities, we have committed our investments to net-zero greenhouse gas (‘GHG’) emissions by 2050 at the latest. This means that the investments we make will not add to the amount of GHG in the atmosphere. We have also set an interim target, committing our investments to 50 per cent emissions reduction by 2030 at the latest, based on 2019 levels.”
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