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BT’s £55bn Pension Scheme Sets 2035 Net Zero Target

Oct 9, 2020

The BT Pension Scheme has announced its goal achieve net zero carbon emissions across its investment portfolio by 2035, aligning it with the goals of the 2015 Paris climate change agreement.

The 55 billion pounds fund, Britain’s biggest corporate pension scheme, invests on behalf of 300,000 current and former members of telecoms company BT Group BT.L.

The BT Pension Scheme (BTPS) said it was targeting net zero across its portfolio by 2035, in a move it said would involve both reducing emissions from its pensioner savings portfolio as well as investing in assets that support the transition to net zero economy.

The commitment is aligned with the Paris Agreement’s target to limit global warming to 1.5C by the end of the century, and covers BTPS’s direct emissions as well as from purchased energy and its value chain – or Scope 1, 2 and 3 emissions – it said.

Otto Thoresen, Chair, BTPS said:
“Climate change poses a clear and present threat to the Scheme’s ability to meet its long-term commitments.

“Continued increases in global warming will amplify existing risks and create new risks with potentially irreversible and catastrophic impacts on markets, society and the environment.

“Setting a net zero goal of 2035 is ambitious but we believe the time to act is now and we hope that others will join us in setting their own net zero goals.”

The net zero policy will build on BTPS’s progress in this area where its listed equity portfolio and its corporate bond portfolio are respectively 40% and 60% less carbon intense than for comparable indices.

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.”

In order to achieve the goal, BTPS said it would use the opportunity arising over the next 15 years from its maturing membership to reallocate assets to companies with lower emissions and focused on transition solutions. It also plans to align new and existing mandates objectives with the net zero goals, selecting and retaining managers that will deliver required investment performance while reporting against climate change targets with a net zero climate scorecard.

The BT group is also a current member of the Race to Zero campaign, you can find more information on their climate actions here.

Find out how to join the Race to Zero here.

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