The Pension Protection Fund (PPF) has increased the proportion of its assets covered by carbon footprint metrics to 82 per cent of fund net asset value, up from around 30 per cent in 2020/21, according to its Sustainability Report 2025/26.

The report also showed that the PPF expanded its transition and sustainable assets framework for private markets, introduced in 2023 for its infrastructure portfolio, to cover around £6.8bn across all private markets asset classes.

The PPF said this provided a more comprehensive view of transition risks and opportunities alongside the sustainable assets identified in the public markets and forestry portfolios.

The PPF's climate watchlist, covering 99 companies responsible for at least 70 per cent of its material financed emissions, showed progress among its highest-emitting holdings, with 87 per cent meeting its carbon disclosure expectations and 79 per cent maintaining or improving their Transition Pathway Initiative (TPI) management quality score.

The PPF also reported that financed scope 1 and 2 emissions across its listed equity, credit and UK credit portfolios were 62 per cent lower in December 2025 than in December 2020.

Meanwhile, analysis carried out with MSCI found that companies representing 31 per cent of the PPF's public equity portfolio could be exposed to at least one potentially severe physical climate risk.

The PPF said the findings help it identify areas where further resilience and adaptation assessments may be needed.

The report, which reflected upon the PPF’s five years of sustainability reporting, showed that during 2025/26 the PPF engaged with 640 companies, with around 38 per cent of outstanding engagement objectives progressing by at least one milestone.

“Climate remains one of the most financially significant risks and opportunities we face as long-term investors,” commented PPF head of ESG and sustainability, Claire Curtin.

“Our approach focuses on building better data, improving our understanding of portfolio exposures, and engaging with companies to support credible transition plans.

“Alongside this, targeted engagement, for example, focusing on our climate watchlist of the biggest carbon emitters in our portfolio, helps prioritise effort where it can have the greatest impact.”

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