The BT Pension Scheme (BTPS) has announced plans to reduce the scope 1 and 2 carbon intensity of its equity and credit portfolio by at least 25 per cent, and real estate by at least 33 per cent, by 2025.

The scheme is also targeting higher reductions in sectors that have been recognised by the UN-convened Net-Zero Asset Owner Alliance (NZAOA) as the hardest to abate sectors, including utilities, oil and gas, transport and steel sectors.

The targets are aligned with the scheme’s target for net-zero greenhouse gas emissions across its entire £57bn portfolio by 2035, and are consistent with the Net Zero Asset Owner Alliance and Institutional Investors Group on Climate Change (IIGCC) frameworks.

Shifts in portfolio construction will be used to reach these targets, alongside efforts to ensure that fund manager mandate objectives are aligned with the scheme’s decarbonisation goals.

The scheme will also be actively engaging with the highest emitting companies in the portfolio to ensure they have clear plans to reduce emissions to net zero, and working with other asset owners, policy makers, industry bodies, data providers, and regulators.

Commenting on the targets, BTPSM CEO, Morten Nilsson, argued that setting realistic five-year decarbonisation goals is "essential" on the path to achieving the scheme's broader 2035 net-zero goal.

"But, we’re under no illusion that reaching our goal will be linear either for us or the wider economy," he clarified.

"We will remain pragmatic in our approach, learning and adapting so we continue to deliver on both our climate and financial targets.

"There are different credible routes to a net zero future, but every route requires strong commitments, trade-offs and increased policy action from governments and regulatory bodies worldwide.

"We are fully committed to playing our part, supporting companies that have credible transition plans and providing funding to those that are helping to create a greener future.”

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