PPF reveals climate progress in third TCFD report

The Pension Protection Fund (PPF) has revealed that 11 per cent of the fund is now allocated to investments categorised as ‘aligned’ with net zero, up from 4 per cent in 2020.

The lifeboat's third annual Climate Change report also showed that the percentage of equities portfolio allocated to companies that have set or committed to a science-based target also increased by a third to 43 per cent from 2021.

The report revealed that the PPF has also made progress in encouraging higher quality disclosure from issuers, deepening climate management beyond listed equities and driving better alignment with the goals of the Paris Agreement.

In particular, the report showed that 84 per cent of portfolio companies in the PPF’s Climate Watchlist now report on carbon emissions data, while 37 per cent of private companies reported environmental, social and governance (ESG) data through a Private Markets ESG reporting pilot.

Operational improvements have also been made, as the report showed that 100 per cent of electricity supply for the PPF's offices is now backed by renewable UK sources, also recording a 59 per cent reduction in energy consumption from its data centres.

This follows on from the lifeboat's new sustainability strategy, which confirmed that it had achieved net-zero for its Scope 1 and Scope 2 market-based emissions for its direct operations, in line with its target to reach net zero in its operational supply chain by 2035 or sooner.

PPF head of ESG and sustainability, Claire Curtin, stated: “Addressing the risks and opportunities arising from climate change is key to our responsible investment and organisational goals.

“We believe placing sustainability at the heart of our activities is essential to mitigating some of the material ESG risks we face. Our Climate Change report helps to build understanding of our strategy and demonstrates how the PPF is trying to use its influence as a force for good.

“We have set ourselves high standards on climate change and responsible investment. Our target is to reach net zero for our operations by 2035 or sooner. For our investments, we seek to contribute to the global transition to net zero through our portfolio and engagement activities.

“In the past two years, we’ve gathered climate assessments across every investment in the fund so we can see how the fund’s position aligns to net zero and the Paris Agreement. We’ve continually evolved this to reflect new methodologies for different asset classes and changes in our portfolios.”

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