Metrics and targets
Key metrics for climate-related risks For listed equities, target return funds, corporate bonds and Liability Driven Investment (LDI) holdings, the Trustee uses the following key metrics:
Total carbon emissions*
• The estimated total annual greenhouse gas/carbon emissions associated with the Scheme’s assets • Expressed in tonnes of carbon dioxide (tCO 2 )
Carbon footprint
• The carbon emissions per £1 million invested
Paris alignment
• The ultimate aim for a Paris aligned investment is a goal of no more than 2.0°C global warming from pre-industrial levels • Expressed as percentage of holdings with approved science-based emission reduction targets • Percentage of holdings with carbon emission data available • Scope 1 emissions are the direct emissions by a company or other entity • Scope 2 emissions result from the energy used by a company or other entity • Scope 3 emissions are indirect and produced by suppliers to an entity or the users of an entity’s products.
Data coverage
The measurement of Scope 3 data is less accurate than for Scope 1 and 2, and lends itself to a significant proportion of estimated data.
*All of the Scheme’s investment managers calculate carbon emissions in line with the Kyoto protocol. The Trustee has used the DWP guidance when choosing their approach to calculating metrics.
The Trustee’s ability to determine appropriate and reliable climate-related risk metrics is limited by the availability of consistent and comparable data. Market practice, tools and data are being improved to obtain a better understanding of climate-related risks across different asset classes.
Where possible, the Trustee has incorporated Scope 3 emissions into this year’s metrics. The Trustee will review the suitability of other metrics on an ongoing basis.
UTC UK Pension Scheme | TCFD Report | 31 December 2025
Version 1
7 of 10
PUBLIC
Made with FlippingBook - PDF hosting