Considering Climate Change Risk
Of the environmental risks, climate change is the one we believe has the most potential to affect the value of our portfolio.
Therefore, we have developed a policy that aims to ensure that climate change risk is considered more explicitly throughout our investment process.
Why Do We Need a Climate Change Policy?
In December 2015 at the UN talks in Paris nearly 200 countries successfully agreed an historic deal to reduce carbon emissions.
The implications of the deal are potentially far reaching for many sectors of the economy and companies in which pension funds invest. Institutional investors are therefore likely to come under increasing pressure to disclose and manage the carbon risk embedded within their portfolios.
The deal is also expected to accelerate investment in zero and low carbon assets. Institutional investors should also ensure that their investment processes can identify attractive investments driven by the transition to a lower carbon economy.
What is Our Policy on Climate Change?
Our policy is firstly about understanding how exposed our portfolio is to climate change. This included a review of our portfolio to understand where there might be value at risk.
The second part of our policy is about making sure that new and existing investments are managed in way that takes account of climate change risks.
The third part of our policy is about actively engaging with the wider investment community and policy makers on climate change. As part of this, we have become a member of the Institutional Investors Group on Climate Change (IIGCC) and have signed up to The Carbon Asset Risk (CAR) Initiative.
Please download our carbon footprint analysis below for further information on how we monitor carbon risk in the portfolio and the results of our most recent carbon audit.
Our Climate Change Journey So Far
Scroll along to see our climate change milestones
Investment Committee presented with Mercer's Report Climate Change Scenarios
Responsible Investment Officer
Appointed Responsible Investment Officer to lead strategy and develop appropriate policies
Investment Committee given detailed training on climate change
Climate Change Policy
TPT Retirement Solutions formally adopts Climate Change Policy
Start to incorporate climate change into new contracts with investment managers
Established four new funds where clauses had been inserted into the Investment Management Agreements to ensure the managers acted in accordance with our Climate Change Policy
Carbon Footprint Analysis
Trucost performed the second carbon footprint analysis of the fund. The findings help inform our ongoing climate change strategy discussion.
TPT signed the Montreal Pledge, an initiative which encourages investors to make public the carbon footprint of their portfolios.
The Paris Pledge for Action
Over 1,000 non-state actors (cities, civil society groups, investors, regions and others) signed the pledge which demonstrates they are ready to play their part to support the objectives of the Paris agreement.
2°C Portfolio Analysis
The Investment Committee considered the impacts of 2°C scenario on the performance of its growth portfolio to help inform long-term asset allocation decisions, climate risk management and to identify climate related opportunities.
Alongside some of the world's largest pensions funds, TPT signed an investor letter urging G20 nations to ratify the Paris climate deal, to double global investment in clean energy and develop carbon pricing.