Perspective

Net zero and Fiduciary Management: what pension trustees need to know

In the last year, we have seen a flurry of governments, companies and pension schemes the world over announcing net zero carbon targets. These targets play a crucial role in global efforts to limit warming in alignment with the goals of the Paris Agreement. And with new climate risk regulations for pension schemes in place, it is clear that Net Zero is increasingly important for pension scheme trustees. But what exactly is Net Zero, and what action should trustees be taking? In this article we discuss:

  • To help reduce the impact of climate change, the world needs to reach Net Zero emissions by 2050.
  • As large providers of capital to companies, pension schemes in the UK have a key role to play.
  • Reaching Net Zero is a journey, and we want our actions to have “real world” impact.
  • There are different metrics to consider, and forward-looking metrics, like Implied Temperature Rise will be important.
  • Engagement should be the primary tool to reduce real-world emissions, with exclusion used as a last resort.
  • Schroders Plc have made the Net Zero Asset Management commitment and we can support you in travelling the journey to Net Zero.

 

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