Climate change is one of the biggest issues on the global agenda. One that has the potential to impact businesses, economies and people everywhere.
We’re actively looking to manage the impact of climate change and its related risks and opportunities through our investment approach. We're committed to:
Read our climate change policy
We consider climate risk management as an ever-evolving strategic journey and we continuously look to refine our processes and set new standards. We will continue to take a leadership role as we refine our processes further and set new standards in other asset classes where access to data and tools is still scarce.
Climate change strategic journey
Driving transparency and disclosure
Given the systemic nature of climate change risks, we champion investor organisations that drive transparency in this area and support several disclosure initiatives.
This includes being members of the PRI, CDP, Institutional Investors Group on Climate Change (IIGCC), Climate Action 100+ and the Transition Pathway Initiative (TPI).
We are also a formal supporter of the FSB’s Task Force on Climate-related Financial Disclosures (TCFD).
The TCFD guidance was created to help companies and investors voluntarily disclose climate-related financial risks in a clear, consistent and reliable way to help lenders, insurers, and investors make informed decisions.
Managing climate change risk and opportunity
We’ve started identifying the types of climate-related risks and opportunities that could impact our investments. Certain risks can have different likelihoods or magnitude of impact, depending on the asset class.
Some examples of these risks include:
- Transition – risks that may impact company earnings in the shorter term, such as policy risks arising from carbon pricing or taxes
- Technology – risks and opportunities as companies develop, or do not adopt, superior technology to build industry-based solutions
- Physical – risks in the medium to long-term that may impact assets such as infrastructure and property in certain locations
- Opportunities within some asset classes. This includes sustainable forestry assets that offer a viable nature-based solution to climate change
Implementing the TCFD framework
We’re actively and continuously implementing the TCFD framework across our portfolio. We also welcome guidance from the DWP on climate reporting.
In 2020/21 we published a dedicated Climate Change report and have also been reporting on managing climate-related risks in line with TCFD in our annual reports. We’ve recently published our second climate TCFD report, demonstrating our progress on this issue over our last financial year.
|Implementation at the PPF|
Our Board is the highest governing body with oversight of climate-related issues.
Our Chief Investment Officer and the Investment Committee receive regular updates.
|Strategy||Assess the alignment of the portfolio with the Paris Agreement.|
|Risk management||Utilize carbon and climate risk data in our portfolio systems. |
Focus on climate-related risks in our stewardship activities.
|Metrics and targets||Disclose portfolio carbon footprint.|
Perform scenario analysis to establish portfolio alignment.
Expand suite of metrics in accordance with available data and regulatory requirements.