Over the 12- month period, the Scheme’s total Scope 1 and 2 carbon emissions and footprint have fallen. There were several reasons behind this change including:
• Changes to the strategic asset allocation made by the Trustee • A general fall in global emissions for developed and emerging market equity indices, to which the Sch eme’s equity and target return portfolios are exposed The overall decline in carbon emissions and footprint was dampened to an extent by the rise in reported emissions from the Scheme’s corporate bond portfolio, which resulted from an increase in the data coverage provided. The Trustee has incorporated Scope 3 emissions into the metrics this year and will continue to do so in future reports. The Trustee was unable to obtain data for one of the Scheme’s funds within the Target Return portfolio. The Trustee, via its investment consultant, has engaged with the manager regarding future availability of Scope 3 data.
Data coverage targets for Scopes 1 and 2 are commented on further in the next section.
There was also an overall improvement in investee companies using science-based emission reduction targets – this is the ‘Alignment’ column in the table. This was due to a general increase in companies that have adopted such targets in recent years. Target used to manage climate-related risks and opportunities The Trustee’s initial target is to work with its investment managers to improve data coverage for Scope 1 and 2 emissions to 90% within the first three years of reporting, i.e. by 31 December 2025, with a view to setting emission reduction targets once that point has been reached.
Over the period, the data coverage on Scope 1 and 2 emissions improved to 88% (as per the above table and methodology) , and towards the Trustee’s overall target of 90%.
There has been an improvement in data quality across all funds on which the Scheme reports. However, the Trustee is mindful that a proportion of the data is estimated and will continue to engage with all managers regarding data coverage and quality, via its investment consultant.
Approved by UTC Pension Trust Ltd on 8 May 2024
UTC UK Pension Scheme | TCFD Report | 31 December 2023
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