The People’s Pension delivered a 53 per cent reduction in total carbon emissions within its Global Investments Fund in the past 12 months, its annual Taskforce on Climate-Related Disclosures (TCFD) report has revealed.

Despite the scheme’s assets growing by £8bn in the past 12 months, the total carbon emissions of the fund fell by around 400,000 tonnes of CO2e, equivalent to a reduction of 35.3 tonnes of CO2e per £1m invested.

This follows the fund’s announcement of the move of £15bn of its assets under management (AUM) into climate-aware investment strategies, which has since risen to £18bn.

It was anticipated that this allocation of funds would reduce carbon emissions of the fund by at least 30 per cent, but the new TCFD data showed that this reduction was “significantly” higher.

After the adjustment to the asset allocation, the report identified three sectors, materials, utilities, and industrials, as responsible for over 70 per cent of the remaining emissions of The People’s Pension’s growth assets.

In addition to this, between 40-60 per cent of the investee companies within these sectors have set science-based targets to reduce their emissions.

The fund has seen an overall 8 per cent increase to 39 per cent invested in companies setting these targets.

Furthermore, the indices, which guide the fund’s equity investments, aim for a 7 per cent per annum reduction in carbon footprint each year into the future, consistent with the Paris Agreement on climate change. 

The People’s Pension also added a new section on nature while updating the TCFD report, as well as adding additional data drilling down into portfolios and sectors to position it as the scheme’s leading reporting document for Responsible Investment.

The People’s Pension trustee chair, Mark Condron, said: “This report tells a compelling story about how we use our size and influence to ensure our members’ savings are allocated and managed responsibly and reinforces our commitment to tackling climate change through investing.”

Adding to this, People’s Partnership chief investment officer, Dan Mikulskis, said it is “committed to doing what it can” to ensure the companies it invests in follow certain standards particularly in material sectors and in its “priority” areas of climate, nature and human rights.

“The TCFD report has become a useful reporting vehicle across a range of climate and Responsible Investment areas,” Mikulskis added.

“Portfolio changes are one pillar of our strategy here, the other being our stewardship approach which is driven by the scheme’s recently published Responsible Investment Policy.”

The publication of the TCFD report follows the launch of the People’s Pension’s enhanced Ethical Fund.

The fund’s enhancements included adding "significantly" more exclusions, such as a blanket exclusion for fossil fuels, including the value chains of coal, oil, gas, and carbon-intensive power generation.

Other new exclusions in the ethical fund included weapons, alcohol, tobacco, gambling, adult entertainment, unsustainable palm oil, recreational cannabis, and for-profit prisons.

The People’s Pension’s offering implemented a strict decarbonisation target, with the upgrades cutting the fund's carbon intensity by at least 50 per cent, reducing it by 10 per cent per annum.

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