How we manage climate change risks when investing your savings 

Climate change is not only an existential threat to people’s lives; it can also affect the value of your pension savings.

Managing climate risk to protect your savings

When you save with The People’s Pension, we* invest your money in companies around the world. If the companies perform well, your pension’s value can rise—but it can also fall if they struggle.

As the world shifts to a low-carbon future, we believe companies that fail to have a proactive climate-change plan risk losing money by failing to compete with companies with more sustainable approaches.

We think it’s therefore important that the companies in which we invest your savings take climate change seriously to protect and grow your savings over the long term.

Why we consider climate change risks and opportunities in managing your savings

In 2015, nearly 200 countries signed the Paris Agreement, a global plan to tackle climate change by pursuing efforts to limit temperature rises to 1.5°C above pre-industrial levels.

To support this goal, experts created the Task Force on Climate-Related Financial Disclosures (TCFD) to guide businesses—including pension schemes—on how to report climate risks and opportunities.

These recommendations are reported on annually in our TCFD Report to ensure that the companies we invest in are preparing for a low-carbon future rather than falling behind.

The purpose of our TCFD Report

The report is intended to:

• Help you understand how climate change could impact the long-term value of your pension savings.
• Protect your savings from the worst financial risks of climate change.
• Access sustainable investment opportunities by investing your savings in companies committed to reducing carbon emissions and providing the solutions needed for the future.

How our investment approach is described in the TCFD Report

The TCFD report follows 11 recommendations across 4 sections that help us by providing a structured approach to reporting on climate-related risks and opportunities:

• Governance – Who is responsible for managing the risk associated with climate change on your pension?
• Strategy – What types of climate risk are we looking at?
• Risk Management – How is climate change risk being managed?
• Metrics and Targets – What is the carbon footprint of your pension, and what are we targeting?

The report provides a detailed breakdown of the ‘who,’ ‘what,’ and ‘why’ behind each recommendation, along with an explanation of how we manage climate risks and opportunities for our members.

A proactive approach to financially material climate risks

Following and reporting against these recommendations means we’re well prepared to keep you informed of how we intend to handle the financial effects of climate change and help protect and grow your savings over the long term.