TPT Retirement Solutions publishes its TCFD Report

TPT Retirement Solutions one of the UK’s largest workplace pension schemes, serving over 2,600 organisations, today publishes its Task Force on Climate-related Financial Disclosures (TCFD) report. The report provides an update on TPT’s progress toward net zero.

TPT has integrated climate change considerations into investment decisions. To meet TPT’s wider climate targets, it intends to allocate capital to climate solutions without sacrificing returns. One way of doing this is by changing its asset allocation and portfolio construction. In 2016, it made its first dedicated allocation to renewable energy generation and renewable supporting technologies. TPT also invested in two additional renewable energy strategies in 2021. The IPCC Sixth Assessment Report highlighted the widening gap of climate change adaption and the importance of global financial flows for these adaption measures which are currently insufficient to meet climate change goals.

An area of particular focus has been greenfield investments, developing new renewable energy infrastructure. This has the positive impact of increasing the stock of assets for generating renewable energy and helps finance the build-out of supporting technologies, such as battery storage. Portfolio allocation to green infrastructures and renewable energy is now an established part of TPT’s asset allocation.

We also allocated to a Low Carbon Transition fund to help manage the climate risk inherent in a market capitalisation approach, which allows it to continue to effectively implement its policy towards voting and engagement.

This comes after TPT published its Climate Action Plan, in December 2022 in which TPT committed to reducing portfolio emissions by a minimum of 25% by 2025 and investing at least 6% of its return-seeking assets in climate solutions.  This is with the aim of being carbon neutral by 2050 and aligns with the Intergovernmental Panel on Climate Change’s (IPCC) decarbonisation trajectory to meet the 1.5°C scenario.

TPT Retirement Solutions' ​TCFD Report is available here.

Cliff Speed, Chief Investment Officer of TPT Retirement Solutions, comments:

"Climate change has the potential to reduce the security of our members’ retirement benefits and represents a systemic risk to the long-term value of our investment portfolio. At the same time, the investment required to transition to a net zero economy presents an opportunity to support the expansion of climate solutions. For us, this means taking an approach to managing our investment risks and opportunities on behalf of our members in line with our fiduciary duty. 

We will look to allocate capital where it will benefit our members but also contribute towards net zero targets. We firmly believe our emission reduction target should be primarily achieved through real-world decarbonisation. As part of our plan, we have enhanced our assessment of climate-related risks and opportunities, embedded scenario planning and adopted metrics and targets."

TPT sits on the Global Steering Group of the Paris Aligned Investment Initiative; a collaborative investor-led global forum representing investors with $34 trillion in assets aligning their portfolios and activities to the goals of the Paris Agreement. The Paris Aligned Investment Initiative collaborates with the Partnership for Carbon Accounting Financials (PCAF) and is a formal partner of the UNFCCC’s Race to Zero Campaign. As part of the ongoing stewardship campaign, we drafted the Statement of Investment Principles embeds the spirit of the Trustee’s policies and processes towards RI, climate, and stewardship.