The People’s Pension (TPP) has moved £15bn of its assets under management into climate-aware investment strategies, in what it says was the largest single move of its kind by a UK master trust, it has revealed.

This has resulted in 70 per cent of the scheme’s primary investment fund being aligned to the Paris Agreement of limiting global temperature rises to below 1.5 degrees.

According to TPP, the carbon footprint of the investments of the majority of its 6.5 million members has been reduced by 30 per cent following the change.

The move also resulted in the divestment from companies that produce thermal coal within the assets covered by the strategy.

Its new investment approach seeks to adjust the level of investment in firms based on their exposure to climate risks and opportunities, and tracks regional indices that aim to exceed the minimum standards of the EU’s Climate Transition Benchmark.

TPP said that this meant it would have an initial minimum reduction in emissions of 30 per cent and will decrease further by 7 per cent each year, aligned with the target of reaching net zero by 2050.

The primary aim of the asset move was to manage the long-term climate change and green transition risks posed to members’ investments, while delivering better returns.

“We believe the changes we have announced mean that TPP is now one of the greenest master trusts in the UK,” commented People’s Partnership, provider of TPP, chief investment officer, Dan Mikulskis.

“Asset owners like us are uniquely positioned to use our size and influence to ensure our members’ savings are allocated and managed responsibly, and that the companies in which we invest are acting in responsible and sustainable ways.

“Key to our investment philosophy is conviction in what we do – if we really believe in something we want to make it core to our members’ retirement savings, rather than a tick to a box.”

TPP trustee chair, Mark Condron, added: “This is a hugely significant moment for TPP and its 6.5 million members as it reinforces our commitment to tackling climate change through investing.

“Our members can be confident their savings are working towards achieving net zero targets and not against it.”

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