The BT Pension Scheme (BTPS) has set a goal to achieve net zero carbon emissions across its investment portfolio by 2035.
The £55 billion fund, the UK’s largest company pension scheme, intends to both reduce emissions from its portfolio and invest in assets that support the transition towards a low carbon economy.
BTPS said over time, all of the investment mandates will be aligned with the net zero goal and the scheme will select and retain managers it believes can achieve the target and will require them to report against what it calls a ‘net zero climate scorecard’.
The asset managers will have to engage with the companies they invest in on behalf of BTPS to set net zero emissions objectives and “insufficient efforts” to curb emissions after a period of time could result in divestment.
Morten Nilsson, CEO, BTPS Management said: “As the global economy looks for ways to recover from the impact of the pandemic, we have an opportunity to do things differently. Over the next 15 years, the scheme will be re-investing the majority of its assets and as we look to deliver the best returns, we must not waste this opportunity to support a cleaner and greener future.
“Asset owners are uniquely placed to use their influence to drive decarbonisation and influence who has access to capital by setting targets to tackle climate change. But we cannot achieve this goal alone.
“Data on emissions needs to improve and companies, governments and consumers must act. Standing by and doing nothing is no longer an option.”
Guy Opperman, Minister for Pensions and Financial Inclusion welcomed the announcement.
He said: “The UK was the first G7 country to legislate for net zero and I warmly welcome the BT Pension Scheme’s commitment to achieving their own net zero target by 2035.
“This is an encouraging sign of how government, industry and investors can work collaboratively to build an appropriate regulatory framework and promote sustainable investment opportunities as we build back better and greener.”