Summary of carbon risk metrics
Equities, target return and corporate bonds
The key metrics for the Scheme’s equity, target return and corporate bond holdings are summarised in the table below.
Data coverage (Scopes 1 & 2) (%)
Footprint (Scopes 1 & 2) (tCO 2 /£1m)
Total emissions (Scope 3) (tCO 2 )
Data coverage (Scope 3) (%)
Asset class (allocation at effective date %)
Total emissions (Scopes 1 & 2) (tCO 2 )
Footprint (Scope 3) (tCO 2 /£1m)
Alignment (%)
52 -
Equities (8%)
8,316
85
120,487
1,243
96
96
Target return (5%)
80 -
10,791
157
18,444
268
15
86
Corporate bonds (32%)
13,251
32
118,465
286
48
97
96
Total/aggregate
32,357
56
257,396
447
45
96
94
Source: Investment managers. Data as at 31 December 2025. 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.
Discussion
There was a decline in the overall carbon emissions associated with the assets considered, although this was based on a lower value of assets.
The carbon footprint (emissions per £m invested) rose slightly over the year. The rise in footprint was driven by the target return portfolio, with higher allocations made by the managers to the higher emitting utilities, energy and industrial sectors. There was, however, an offsetting fall in carbon footprint across equity indices, in particular the European and Asia Pacific exposures held in the Scheme’s equity portfolio.
Scope 3 emissions and footprint reduced for the assets considered over 2025.
Data coverage improved across all portfolios and scopes considered above (with the exception of the target return portfolio’s Scope 3 coverage, which remained at c.80%). Targets for data coverage are commented on further in the next section. There was a decline in the investee companies using science-based emissions reduction targets – this is the ‘Alignment’ column in the table. This was due to a general decline in companies within the Scheme’s target return portfolio of companies, and corporate bond issuers, that have adopted such targets, as well as a change in methodology.
LDI holdings
The key metrics for the Scheme’s LDI portfolio are summarised in the table below:
Asset class (allocation at effective date %) LDI portfolio (31%)
Total emissions (Scopes 1 & 2) (tCO 2 )
Total emissions (Scope 3) (tCO 2 )
Data coverage (Scope 3) (%)
Footprint (Scopes 1 & 2) (tCO 2 /£1m)
Footprint (Scope 3) (tCO 2 /£1m)
Data coverage (Scopes 1 & 2) (%)
Alignment (%)
100 -
N/A
N/A
N/A
N/A
51,039
125
Source: Investment manager. Data as at 31 December 2025. Absolute emissions have been provided on funded gilts only (i.e. excluding those on repo), using the Partnership for Carbon Accounting Financials (PCAF) approach. Emissions are defined as scope 1 and 2 in line with Department for Work and Pensions (DWP) guidance. The data provided by the investment manager and its interpretation is still developing and, consequently, it should not be assumed that the data used to calculate the metrics are consistent year-on-year.
UTC UK Pension Scheme | TCFD Report | 31 December 2025
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