HSBC Bank (UK) Pension Scheme today said it has set a “real economy emissions reduction interim target” of 50% by 2030 or sooner for its equity and corporate bond mandates.
The baseline will be the end of 2019.
The target is part of a wider commitment to achieving net-zero greenhouse gas emissions by 2050 or sooner across its £36bn defined benefit and open defined contribution assets. The DB section is closed and substantially de-risked with no equities.
In a statement today, the scheme said its commitment was being made “in the context of the trustee’s wider efforts to manage the impact of climate change on the scheme’s investments and the consequent impact on the financial interests of its members”.
The statement also contained wording indicating that the scheme wanted to go further than the aforementioned 50% reduction, but that doing so would be very stretching. It said the scheme’s commitment included “having the ambition of achieving all of its corporate bond and equity investments being fully aligned to the goals of the Paris Agreement by 2030 across its DB and DC assets”.
The scheme also said its commitment would involve enhancing the scheme’s engagement and stewardship efforts through its asset manager, “given that it believes strongly in engagement rather than exclusion as a principle, to achieve real economy reductions”.
Russell Picot, chair of the pension scheme’s trustee board, was one of more than a dozen pension scheme chairpersons to make a net-zero statement of support earlier this year.
In today’s statement he said the HSBC scheme had been active in addressing ESG issues for a number of years, including working with others to facilitate a system-wide transition to a net-zero economy.
“The time is right to take the next steps to further embed climate change actions into our future plans for the benefit of our members,” he said.
In 2016 HSBC Bank (UK) pension scheme became the first pension scheme to include a positive climate risk tilt in its DC default fund.
According to a recent report from Accenture, almost a third of Europe’s largest listed companies have pledged to reach net-zero by 2050 and companies with a net-zero goal reduced emissions by 10% on average over the last decade.
However, the study found that just 5% of the European companies were on track to achieve their net-zero target dates in their own operations if they continued the pace of emissions reduction achieved between 2010 and 2019.
In the UK, conservation campaign group WWF today called on the government to require large businesses to publish net-zero transition plans, saying that only 19% of FTSE 100 companies have set out in detail how they plan to achieve net-zero emissions by 2050.
Yesterday the Local Authority Pension Fund Forum, Sarasin & Partners and TCI Fund Management wrote to all UK-listed companies urging them to submit five-year net-zero transition plans to the shareholder vote on an annual basis.
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