Climate Change Risk
The Cheshire Pension Fund (the Fund) recognises that, in addition to the wider impacts of climate change, owning investment assets with a high carbon footprint, poses a potential investment risk.
The Fund wishes to actively manage this risk and has therefore committed to annually commissioning an independent assessment of all its publicly listed investment assets to determine the Fund’s overall carbon footprint and assess potential climate change impacts and opportunities.
In 2020 the Fund first published the results of this assessment in its brand new Climate Risk report, using the framework recommended by the Task Force on Climate Related Financial Disclosures (TCFD). The Fund’s second annual Climate Risk report was published in 2021 and provided an update on the Fund’s progress against its climate change targets as well describing the broader steps the Fund is taking to manage climate-related risks and incorporate climate risk management into its investment processes.
We’re pleased to announce that the third TCFD report, for 2022, is now available, which again demonstrates our commitment to making positive progress in addressing the impact of climate change on the Fund’s investments.
The report highlights that the Fund is:
- Able to show an average reduction of 14.9% per year, since 2019, in our total equities carbon footprint.
- Now 43.8% lower than the FTSE All World market index, for our total equities portfolio carbon footprint – our target is to be below 50% by the end of 2023.
- Investing in infrastructure projects, including renewables, which increased significantly during the year.
A short summary of the key points in the Cheshire Pension Fund’s 2020 TCFD report is also provided:
A media release to accompany the publication of the Fund’s 2020 TCFD compliant Climate Risk report can be found below:
Climate Change Strategy
Following publication of the above Climate Risk report in September 2020, the Fund is now publishing its Climate Change Strategy document. The publication of a stand-alone Climate Strategy document recognises the importance of the issue and draws together all of the Fund’s climate related policies, statements and targets into one consolidated document. The Climate Strategy was endorsed by the Cheshire Pension Fund Committee on 4 December 2020 and a link is provided below:
The media release to accompany the publication of the Climate Change Strategy is provided below:
Climate Risk consultation – Fund response
The Department for Levelling Up, Housing and Communities issued a consultation document on 1 September 2022, seeking views on proposals to require Local Government Pension Scheme (LGPS) administering authorities in England and Wales to assess, manage and report on climate-related risks, in line with the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD).
Cheshire Pension Fund’s response to this consultation can be found via the link below: