BT Pension Scheme goes green – could others follow?
Country’s largest company pension scheme targets net zero greenhouse gas emissions by 2035.
8th October 2020 14:30
Country’s largest company pension scheme targets net zero greenhouse gas emissions by 2035.
Britain’s largest company pension scheme is looking to go green in an unexpected environmental boost for its future retirees’ retirement pots.
The BT Pension Scheme (BTPS) has announced ambitious plans to achieve net zero greenhouse gas emissions from its £55 billion portfolio by 2035.
The move will involve both reducing emissions from the scheme’s portfolio and investing in assets that will support the move towards a low-carbon economy.
The goals set by the defined benefit scheme are more ambitious than the government’s own target to reach net zero by 2050.
In contrast, state-backed defined contribution fund National Employment Savings Trust is also aiming for its portfolio to reach a net zero greenhouse gas emissions target by 2050 for its retirement savers.
BTPS says that all its members will be retired by 2035, so it needs investments that provide safe, predictable income, such as bonds and secure income assets, to meet their pension payments.
This creates a unique opportunity, without incurring additional transaction costs, to invest in companies that have lower emissions and increase investment in solutions, the scheme said.
Otto Thoresen, chair of BTPS, says: “Climate change poses a clear and present threat to the scheme’s ability to meet its long-term commitments.
“Continued increases in global warming will amplify existing risks and create new risks with potentially irreversible and catastrophic impacts on markets, society and the environment.
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“Setting a net zero goal of 2035 is ambitious, but we believe the time to act is now and we hope that others will join us in setting their own net zero goals.”
The shift was welcomed by David Macdonald, founder of ethical-focused advisory firm, The Path.
He says: “This is exactly the sort of action we want to see pension funds making, not only in terms of the net zero commitment but with a deadline for implementation.
“We hope others will rise to the challenge and make the sorts of changes pension scheme members want to see but have difficulty influencing.”
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