Metrics and targets
Key metrics for climate-related risks For listed equities, target return funds and corporate bonds, 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 • Data 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 user s 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, t he Trustee has incorporated Scope 3 emissions into this year’s metrics. The Trustee will review the suitability of other metrics on an ongoing basis.
Summary of metrics for the Scheme The key metrics for the Scheme’s equity, target return and corporate bond holdings are summarised in the table below:
Total emissions (Scopes 1 & 2) (tCO 2 )
Data coverage (Scopes 1 & 2) (%)
Total emissions (Scope 3) (tCO 2 )
Data coverage (Scope 3) (%)
Asset class (allocation at effective date %)
Footprint (Scopes 1 & 2) (tCO 2 /£1m)
Footprint (Scope 3) (tCO 2 /£1m)
Alignment (%)
Equities (9%)
113,174
874
95
13,554
105
52
95
Target return (5%)
16,417
421
91
5,944
84
20
82
Corporate bonds (33%)
147,387
301
87
18,035
37
45
87
Total/aggregate
276,978
453
89
37,533
55
43
88
Source: investment managers. Data as at 31 December 2023. Arrows depict change from last year, where previous data is available. The data provided by the investment managers and its interpretation are still developing and, consequently, it should not be assumed that the data used to calculate the metrics are consistent year-on-year. For those who could provide this information, the Scheme’s managers have used a degree of estimated data when calculating their carbon emission data. Due to data availability, the amount of data estimated for Scope 3 data (where provided) is significantly larger across all three asset classes versus Scopes 1 and 2 data.
UTC UK Pension Scheme | TCFD Report | 31 December 2023
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