Risk management
Processes for identifying and assessing climate-related risks The Trustee seeks to identify and assess climate-related risks through a combination of:
• Top-down strategic analysis, e.g. through scenario testing across various scenarios that consider both transition and physical risk • Annual monitoring of carbon exposure metrics • Bottom-up analysis of climate- related risk undertaken by the Scheme’s investment managers on behalf of the Trustee • Advice from covenant and actuarial advisers on the resilience of the Scheme’s funding plan, taking account of the financial strength, operating markets and business plans of its sponsoring employers and group parent Processes for managing climate-related risks The Trustee manages risk according to financial materiality in the context of the Scheme’s expected lifetime and plans to bring it into a position where it has a low-risk funding and investment strategy over the short to medium term. The Trustee’s approach to climate -related risk management is guided by strategic analysis, assessment and monitoring of carbon metrics, and the perceived ability of the investment managers to incorporate ESG-related risk management into their investment processes, inclusive of their stewardship and engagement approach on climate issues.
The Trustee’s policy for managing the broader range of risks is discussed in the SIP.
UTC UK Pension Scheme | TCFD Report | 31 December 2023
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