Keeping our cool with climate change
It might sound strange, but the costs associated with climate change can have a significant impact on companies and the financial markets.
This in turn means it can affect the assets of a pension scheme like ours. And ultimately affect the value of your savings, especially if you’re an IWDC member or pay Additional Voluntary Contributions (AVCs).
So what are we doing about it?
Our role in combating climate change
We understand that the large-scale financial industry has a responsibility, not only to protect members’ savings and investments. But also to play its part in tackling the impact of climate change on the world in general.
With this in mind, the scheme’s investment manager, RPMI Railpen, has long considered climate change in its investment decisions on behalf of our Trustees.
- sourcing low carbon investment opportunities
- encouraging the companies we invest in to act on climate change and
- withdrawing investment on climate grounds where necessary
As one of the UK’s largest pension schemes, we also work directly with policymakers and the wider industry to create a regulatory framework which supports the transition to a net zero world.
Our work on climate change to date
In 2019, RPMI Railpen formally committed to voting in Annual General Meetings (AGMs) against any companies that were believed to lack robust oversight of climate change at management level.
Earlier this year the policy was expanded to include voting against companies in key climate-affected sectors that do not make the impact of climate change clear in their financial accounts.
It’s the latest in a series of steps RPMI Railpen have taken on behalf of the Trustees, which recognise the importance of climate change and its impact on your savings. Others can be found in the timeline below.
Plans on climate change moving forward
RPMI Railpen recently published its first Climate-Related Disclosure explaining its work on climate change and our plans for the future. This will be updated every year to reflect the fast moving nature of climate change. You can read it in full here.
We’ve also set up a cross-team Climate Working Group, chaired by Railpen’s Chief Investment Officer, Richard Williams, to look at how we can play our part in helping the UK achieve its ambition to bring greenhouse gas emissions to net zero by 2050.
We are actively involved in the Government’s Pensions Climate Risk Industry Group (PCRIG), which supports the pensions industry in responding to climate change and aims to raise standards of climate-aware investment.
And we will continue to use our voice, alongside those of other investors, to publicly call for positive corporate action on climate change and to apply positive influence on the companies we invest in.
We also hope that the UK hosting the 26th UN Climate Change Conference (UKCOP26) later this year will provide more opportunities to discuss the impact of climate change, not only on your pension but on the world you will retire into.
Find out more about our approach to climate change
If this blog has piqued your interest, you can read more about the Trustees’ and Railpen’s approach to protecting members’ futures, including our work on climate change and other environmental, social and governance factors (ESG) in the Stewardship Report here
You can also read more about RPMI Railpen’s overarching approach to sustainable ownership here.