Institutions

Chairs of UK pension giants sign Prince Charles’ Net Zero pledge

Move comes as Generation warns on low quality of some Net Zero commitments

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The chairs of some of the UK’s biggest pension funds, including the BT Pension Scheme, Barclays UK Retirement Fund and HSBC Bank Pension Trust, have committed to set Net Zero targets over the next year.

As part of Prince Charles’ Accounting for Sustainability Project (A4S), 14 UK pension chairs, who collectively manage £267.9bn of pension assets, have committed to set targets to align their investment portfolios with a 1.5°C pathway. 

In a statement published yesterday, the chairs said they also expect their service providers to support their Net Zero ambition. The signatories added their ability to uphold their fiduciary duty in providing long-term, risk-adjusted returns to their members is “threatened by the impact of climate change, both now and in the future”. 

The signatories commit to five actions over the next 12 months including being an active shareholder on the issue and managing physical and transitional climate risks within their portfolios. 

It is the latest in a series of high-profile finance sector Net Zero collectives which are garnering strong support in the run-up to COP26. 

This weekend’s G20 Climate Summit in Venice saw the official launch of the Net Zero Insurance Alliance by AXA, Allianz, Aviva, Generali, Munich Re, SCOR, Swiss Re and Zurich Insurance Group.

Just last week, the Net Zero Asset Managers initiative, including BlackRock, Vanguard and State Street, announced it had 128 commitments totalling $43trn, nearly half the world’s asset manager capital.

There is also the Net Zero Asset Owner Alliance, representing over $6.6trn under management, and the Net Zero Banking Alliance, representing over $37trn, almost a quarter of global banking assets. 

All these groups are under the umbrella initiative Glasgow Financial Alliance for Net-Zero (GFANZ), created by Mark Carney, the UN Special Envoy on Climate Action and Finance and former Governor of the Bank of England, the UN and the COP26 Presidency. 

But as financial commitments to net zero grows, there are concerns about their robustness. Today, Generation Investment Management’s Sustainability Trends Report 2021 raised greenwashing as a key risk to the sustainable transition. “There is growing unease at the low quality of some Net Zero commitments,” it says. “The gap between goals and actions and the absence of guardrails for those utilising natural solutions, including as offsets.”

This week the Global Impact Investing Network, released a report on how institutional asset owners set impact goals and targets, based on interviews and responses from asset owners. "Of those who do set targets, all but one reported that the board of directors, trustees, and senior leadership are involved in setting
those targets, while very few indicated the same for their asset managers or investment teams," the report noted. 

A4S has also developed guidance for pension scheme trustees on how to align with a Net Zero pathway.

The full list of signatories to the the A4S Pension Fund Net Zero Statement of Support:

  1. Otto Thoresen, Chair, British Telecom (BT) Pension Scheme  
  2. Russell Picot, Chair, HSBC Bank Pension Trust (UK) Limited 
  3. Peter Goshawk, Chair, Barclays UK Retirement Fund  
  4. Denise Le Gal, Chair, Brunel Pension Partnership, LGPS pool  
  5. The Honourable Nicola Roxon, Chair, Health Employees Superannuation Trust Australia (HESTA) 
  6. Ruston Smith, Chairman, Tesco PLC Pension Scheme  
  7. Chris Hitchen, Chair of the Investment Committee, National Employment Savings Trust (Nest) 
  8. Councilor John Mounsey, Chair, South Yorkshire Pensions Authority, South Yorkshire Pension Fund  
  9. Tony Ashford, Chair, Unilever UK Pension Fund 
  10. Robert Gould, Chair, Pensions Committee, Environment Agency Pension Fund  
  11. Rory Murphy, Chair of MNOPF Board of Trustees, Merchant Navy Officers Pension Fund  
  12. Chris Martin, Executive Chairman of ITS (acting as Professional Corporate Sole Trustee), Atos UK 2019 Pensions Scheme 
  13. Ken Woodier, Chairman, Pennon Group Pension Scheme 
  14. Andrew Warwick-Thompson, Chair of the Board of Trustees, Scottish Widows Master Trust