The BT Pension Scheme is targeting achieving net zero greenhouse gas emissions across its £55bn portfolio by 2035.

As reported by our sister title, Pensions Age, the UK’s largest company pension scheme will reinvest the majority of its assets over the next 15 years in companies that have lower emissions and increase investment in transition solutions.

Investment mandates will be aligned with the net zero goal “over time”, and the scheme will select and retain managers it believes can achieve its targets and it will require managers to report against a net zero climate scorecard.

Furthermore, managers will engage with investments to set net zero emissions objectives, although “insufficient efforts” to reduce emissions after a period of engagement “may result in divestment”.

The scheme stated that the goal was set to limit the risk climate change poses to the scheme meeting its long-term commitments.

Commenting on the target, Pensions Minister, Guy Opperman, said: "The UK was the first G7 country to legislate for net zero and I warmly welcome the BT Pension Scheme’s commitment to achieving their own net zero target by 2035.

“This is an encouraging sign of how government, industry and investors can work collaboratively to build an appropriate regulatory framework and promote sustainable investment opportunities as we build back better, and greener.”

A BT Pension Scheme survey, conducted in February 2020, revealed that 74 per cent of its members expected the scheme to continue considering the environmental and social impact of the investments it makes and 65 per cent said they expected the scheme to use its investment to make a positive impact on the environment and society.

“Climate change poses a clear and present threat to the Scheme’s ability to meet its long-term commitments,” said BT Pension Scheme chair, Otto Thorsesen.

“Continued increases in global warming will amplify existing risks and create new risks with potentially irreversible and catastrophic impacts on markets, society and the environment.

“Setting a net zero goal of 2035 is ambitious but we believe the time to act is now and we hope that others will join us in setting their own net zero goals.”

To achieve its goal, the scheme will focus on four areas: portfolio construction, mandate design and manager selection, stewardship, and advocacy.

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