The last few months have seen us make significant strides in aligning our investments with our climate change principles and providing a better ethical option, ensuring our members’ savings reflect their values and contribute towards a more sustainable and responsible future.

We’ve halved the carbon emissions of our main investment fund

We’re pleased to announce that we’ve more than halved the carbon footprint of our main investment fund compared to 12 months ago.

In our annual Task Force on Climate-related Financial Disclosures (TCFD) report, we revealed that the total carbon emissions within our scheme’s Global Investments (up to 85% shares) Fund have been reduced by 53%¹.

Whilst our scheme’s assets have continued to grow substantially, the total carbon emissions of the fund have dropped by approximately 400,000 tonnes of CO2e – which is the equivalent of a reduction in carbon intensity of 35.3 tonnes of CO2e per £1m invested.

The move of £15bn+ of the scheme’s assets under management into climate aware investment strategies means the majority our main investment fund assets align with the Paris Agreement goal of keeping warming below 1.5°C, with more work being done to align the rest of the assets.

Our enhanced Ethical Fund

From 1 October 2024, we’ve enhanced the investment strategy of our Ethical Fund, updating it to better reflect our members’ values and keep pace with the evolving investment preferences of the increasing number of new pension savers.

This is a major jump forward for our Ethical Fund, as the totality of exclusions and the strengthening of decarbonisation targets means it now sits among the leading ethical and sustainable offerings in the UK market.

Benefits for businesses and employees

• Increased employee engagement – Offering a fund with strong ethical and environmental values can enhance employee satisfaction and engagement.
• Enhance recruitment and retention – Attract and retain top talent by offering a pension fund that reflects the ethical values of today’s workforce.
• Positive company image – Companies can enhance their public image by supporting and promoting an ethical and sustainable investment option.

Key enhancements to the fund

• Expanded exclusions – We’re adding to the fund’s current exclusions (severe environmental, social, and governance (ESG) controversies and controversial weapons) with new exclusions in place for fossil fuels, weapons, alcohol, tobacco, gambling, adult entertainment, unsustainable palm oil, recreational cannabis, and for-profit-prisons.
• Complete fossil fuel exclusion – Our fund will now exclude all fossil fuels, including the value chains of coal, oil, gas, and carbon-intensive power generation.
• Strict decarbonisation targets (something many other ethical funds on the market don’t provide) – We aim to reduce the fund’s carbon intensity (the amount of carbon dioxide (CO2) emitted per £1m invested) by at least 50%, with an additional 10% reduction each year. This aligns with the global goal of limiting warming to 1.5°C above pre-industrial levels.

Targeting long-term growth

While maintaining our commitment to robust ethical standards, the updated fund will continue to target stable returns comparable to those of global equity markets, even with the new exclusions. For the first time, the fund will also invest in emerging markets to seek new growth opportunities.