Trustees of the Universities Superannuation Scheme (USS) have committed to cutting the carbon emissions generated by the scheme's investment portfolio by 25 per cent by 2025, and by 50 per cent by 2030, relative to a 2019 baseline.

As part of this ambition, the scheme has announced a new £500m sustainable growth mandate, which will be invested globally in high-growth, privately-owned businesses that are developing technologies to help the broader economy to decarbonise.

The mandate will be managed by USS’s in-house investment management team’s private markets group.

This aims to complement the USS's existing renewable energy strategy, which will continue to develop and invest in wind and solar generation capacity, with a total of £1.2bn invested in wind farms and green technologies as of 31 March 2021.

The commitments were also made shortly following the introduction of a climate tilt to a £5bn portfolio of USS's equity investments, in a move that was expected to reduce emissions by around 30 per cent compared to the broader equity market.

USS Group CEO, Bill Galvin, commented: “We hope that these announcements give confidence to our members and to other stakeholders of the seriousness with which we are treating decarbonisation.

"This is not an easy task, and along with the rest of the industry we will face challenges in the early years before the data quality improves, but these targets are a statement of intent, and give us important staging posts against which to assess our progress.

“The climate tilt and new investment mandate form part of a much bigger plan that will involve all of our investment professionals and the management teams of our portfolio companies.

"Indeed, we will need to work closely with our industry peers, regulators, governments and many others. Ultimately, we all need to work together to achieve net zero.”

The USS is also at the centre of national strike action that began today at 44 universities, after the University and College Union (UCU) raised concerns that proposed changes to the scheme could result in a 35 per cent cut to members’ guaranteed retirement income.

A total of 68 universities are set to be impacted by the 10 days of strike action, which started today (14 February), despite Universities UK (UUK) recently confirming that it would consult employers of the scheme on the union's proposed changes.

However, UUK previously warned that UCU's proposals don't appear "to be a serious attempt to reach agreement", emphasising that the level of employer contributions called for were "far beyond the mandate employers have given UUK".

UCU general secretary, J Grayd, commented: "The action that begins today and will eventually hit 68 universities is down to vice-chancellors who have failed staff and students.

"They have pushed through brutal pension cuts and done nothing to address falling pay, pay inequality, the rampant use of insecure contracts and unmanageable workloads.

"It is outrageous that when they should be trying to resolve this dispute, employer representatives have instead been finding new ways to deduct pay from university workers.

"Throughout these disputes, our union has offered simple solutions that would avert industrial action and benefit the sector in the long-term, but time and again employers have chosen to continue pushing staff to breaking point, while the sector continues to bring in tens of billions of pounds each year.

"To avoid this period of industrial action all vice-chancellors had to do was accept UCU’s viable pension proposals and take action over worsening pay and working conditions. That they didn’t is an abject failure of their leadership.

"As 10 days of action begins today vice-chancellors urgently need to get around the table and help UCU resolve these disputes."

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