14 UK Pension Funds Sign Prince of Wales’ Climate Pledge

The chairs of 14 UK pension funds with a combined £267.9 billion ($315 billion) in assets under management (AUM) have signed the Accounting for Sustainability Project (A4S)’s Pension Fund Net Zero Statement of Support, and have committed to setting a net-zero goal within 12 months.

“Pension schemes are highly exposed to the risks of an unsustainable future, but also powerfully positioned to influence a sustainable outcome,” A4S Executive Chairman Jessica Fries said in a statement. “The pension fund chairs who are signing our Net Zero Statement of Support are committing to address the risks of climate change and invest in a resilient, sustainable future.”

The pension fund signatories include, among others, the British Telecom Pension Scheme, HSBC Bank Pension Trust (UK) Limited, Barclays UK Retirement Fund, Unilever UK Pension Fund, Brunel Pension Partnership, and the Tesco PLC Pension Scheme.

“With industry groupings announcing their collective ambition to reach net zero, the A4S Pension Fund Net Zero Statement of Support helps to amplify the influential voice of the pension fund chair in the run up to COP26,” said A4S, referring to the 26th UN Climate Change Conference of the Parties, set to be held in Glasgow, Scotland, later this year. The A4S organization, which was founded by the Prince of Wales in 2004, said pension fund chairs represent the “start of the chain” for investment decisions and are responsible for setting the direction of their plan’s investment strategy.

“Using their collective voice encourages peers to consider the steps to a net zero-aligned pension portfolio,” said A4S. “Rather than a demand for others to take action, this statement of support is a commitment by those who are signing it to take action.”

The statement cites the Intergovernmental Panel on Climate Change (IPCC)’s warning that failing to prevent global warming from exceeding 1.5°C will result in severe consequences. It said that to limit the increase in global average temperatures to 1.5°C above pre-industrial levels, global emissions need to be halved by 2030, cut to net zero by the middle of the century, and become net negative from then on.

“As chairs of pension and other retirement schemes, we recognize the scale of the transition needed and the challenges climate presents for governments, business, and civil society,” the statement of support reads. “In our positions, we recognize that our ability to uphold our fiduciary duty in providing long-term, risk-adjusted returns to our members is threatened by the impact of climate change both now and in the future.”

The statement goes on to say that “our responsibilities include driving capital toward positive outcomes, being a catalyst for innovation and opportunity, helping to finance the transition to a net-zero global economy, investing in resilience to protect against physical risks and restore nature, and leveraging our influence across the investment chain.”