Climate Change
Tyne and Wear Pension Fund Climate Change Ambitions - November 2021
The Tyne and Wear Pension Fund has now approved its first Climate Change Policy Plans and Policies - Climate Change Policy[pdf - 283kb] which includes ambitious targets to reduce carbon emissions from 2019 levels by up to 35% by 2025 and up to 60% by 2030 and achieve Net Zero carbon emissions by 2050 or sooner.
The new policy and range of background information is published on the Investments page.
The policy builds on work already undertaken by the Fund which has led to a reduction in the carbon footprint of 30%* from 2010 with 15%* being in the last two years.
One reason for the above reduction in emissions is the decision for the Fund to invest into the Future World Index Equity Funds, which invests in companies that score well against environmental, social and governance criteria, including companies which are less carbon intensive or produce green revenues e.g. renewable energy.
Climate change is a major focus for the Fund. The new Policy demonstrates the Fund's commitment to addressing climate change and playing its part in reducing carbon emissions and supporting climate solutions as they evolve. This includes a major commitment to implement a lower carbon approach across the Fund's investments to support the targets set by the UK Government and many other countries to achieve the aims of the Paris Agreement to limit global temperature rises to 1.5 degrees.
The Fund also commits to achieving Net Zero carbon emissions on its own administrative operations by 2030 in line with the Climate control target set by South Tyneside council who are the Administering Authority of the Fund.
The Fund's pooling partner Border to Coast has also established its own Border to coast Climate Change Policy including a Net Zero target date of 2050 which the Fund supports.
In line with its Investment beliefs the Fund has adopted an approach of engagement with companies to influence them to move towards a lower carbon future that is consistent with the Fund's own investment strategy. Whilst the Fund believes in engagement rather than a blanket divestment from entire sectors e.g. fossil fuel companies, it does believe in divesting or not owning individual companies who are not appropriately addressing climate change risks.
The Fund commits to undertake climate based financial risk assessments and to report the results as part of the annual Task Force for Climate Related Financial Disclosures (TCFD) Report. The Fund will produce annual carbon footprint analysis and report the results of this exercise.
Over the next year the Fund will develop and publish a clear Roadmap to set out what specific actions will be taken to ensure that targets will be achieved.
Whilst the Fund has committed to achieve Net Zero by 2050 or sooner, it recognises that there are still uncertainties around the methodologies of carbon emission reporting and the quality of data currently in use.
It also notes that when setting policies over such a long period there will inevitably be developments in technology and scientific understanding which are currently unknown that will affect the global response to climate change.
With this in mind, the Fund has committed to review the interim and long term targets every three years as a minimum and hopes that positive progress is made to enable the Net Zero target date of 2050 to be at least achieved and ideally brought forward.
* Based upon the Weighted Average Carbon Intensity (WACI) metric
