The Cushon Master Trust has announced plans to cut the scope 1 and 2 carbon emissions of its default strategy’s growth phase by 80 per cent by September 2030, warning however that the remaining 20 per cent will require policy intervention to address.

The target coincides with Cushon Master Trust’s decision to end its use of carbon offsets for future clients and prioritise its plans to fully decarbonise its main default investment strategy, the Cushon Sustainable Investment Strategy, "at pace".

This, according to Cushon, aims to demonstrate that a pension scheme can rapidly transition towards net zero without compromising the diversity of its investments or outcomes for members.

Within the growth phase, the default fund has already achieved a 44 per cent reduction in scope 1 and scope 2 emissions compared to its previous default fund reported in its Task Force on Climate-related Financial Disclosures (TCFD) report, ahead of its initial target of 20 per cent.

Against its 2022 benchmark, it has achieved a 64 per cent reduction in scope 1 and 2 emissions.

However, the group argued that whilst it is on track to meet its 80 per cent target, the remaining 20 per cent of emissions are not in the master trusts’ control, and is instead a systemic issue, where all businesses, no matter their climate ambitions, operate within a fossil-fuel reliant economy.

Given this, Cushon stressed the need for "unambiguous policy intervention" from government and industry collaboration to end that reliance, warning that without this, the pension industry’s 2050 net-zero goals are at risk.

Commenting on the plans, Cushon strategic adviser, Julius Pursaill, said: “In setting an emission reduction target of 80 per cent by 2030, we are again attempting to demonstrate what is possible.

"Our target is supported by a transition plan, which demonstrates asset class by asset class, mandate by mandate, how we will achieve these reductions.

"We believe Cushon’s transition plan demonstrates these reductions can be achieved without an unacceptable loss of diversification, and still leave room to support high emitting businesses in transition.”

Adding to this, Cushon Master Trust chair, Roger Mattingly, highlighted the new target as “another milestone” in the providers mission to build a pensions landscape that not only provides better outcomes in retirement but also acts as a force for good in the world.

“With our transition plan in place to reduce emissions at pace, we’re proud to help lead the charge in the pensions industry towards net zero,” he continued.

“However, individual providers can only do so much – at some stage the industry, government and other stakeholders will have to collaborate to remove the final portion of emissions.

"We need to start this conversation now if the industry as a whole is going to meet 2050 net-zero targets.”

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