The Pension Insurance Corporation (PIC), a specialist insurer of defined benefit (DB) pension schemes, has set out its climate-related disclosures, as it published its second Task Force on Climate-related Financial Disclosures (TCFD) guidelines report this morning.
The report – Climate action: Progress towards net zero – builds on PIC’s commitment to be carbon neutral across its own emissions by 2025 and across all sources of carbon emissions by 2050.
“We set targets against what we can measure. This is why we have invested in measuring the footprint of our investment portfolio and our own operations,” said Rob Groves, PIC’s chief investment officer.
“Climate and wider ESG considerations are embedded into our investment decision making process, and we seek specific climate data on the underlying assets we invest in. We focus on the quality, robustness and comparability of the data on which we base these decisions, and we are committed to working with the industry to improve the availability and quality of climate-related data,” he said.
The report disclosed that PIC is committed to decreasing its investment carbon intensity by 50% by 2030 (from a 2019 baseline) and that 70% (FY 2021: 60%) of the Corporation’s public corporate credit portfolio, where data is available, is aligned to a trajectory of 2°C, or below.
The weighted average carbon intensity of PIC’s investment portfolio is 175 tons CO2e which covers 78% of its investment portfolio by value, a 14% decrease in carbon intensity, compared with assets for which it had carbon intensity data, in 2021, the report added.
PIC’s approach to climate risk is incorporated into the group’s sustainability strategy and is overseen by the board. The report contains insights into PIC’s governance and strategy of ESG areas, including oversight of climate risk and how ESG is integrated within the PIC portfolio.
Simon Abel, chief strategy officer at the PIC, said: “Climate change is an issue that is of real importance to us all. Reporting against TCFD, is in line with our purpose as we seek to manage climate risk ever more closely. PIC invests for the long-term in assets that also deliver social value and particularly in projects the UK desperately needs.”
Abel noted that for the second year running PIC’s TCFD report reinforces the Corporation’s ongoing transparency to its strategy, governance, risk management processes and key metrics for managing the impact of climate change on the business and its investment portfolio.