HSBC and FRR set targets for reducing carbon emissions from pension plans

The HSBC Bank (UK) pension scheme in London has pledged to halve the carbon emissions of its equity and corporate bond portfolios by 2030, the spokesperson confirmed. .

The £ 36bn ($ 48.8bn) pension fund will target net zero carbon emissions from its defined benefit and defined contribution portfolios by 2050.

As part of the latest effort, plan leaders will also strengthen engagement with portfolio companies and stewardship in collaboration with plan managers. Directors will engage with businesses through plan managers to encourage them to develop plans to meet those goals, the spokesperson said.

However, if current commitments with portfolio companies prove insufficient, directors will reassess the situation, she added, noting that the plan prefers commitment to divestment.

“The administrator recognizes the growing urgency with which climate change must be tackled and is playing an active role in supporting the campaign to decarbonize the economy,” said Russell Picot, chairman of the scheme’s board of directors. retirement from HSBC Bank (United Kingdom). in a press release.

“Now is the time to take the next step to further integrate climate change actions into our future plans for the benefit of our members,” he added.

Additionally, the Paris-based Pension Reserve Fund has said on its website that it will reduce its portfolio’s carbon emissions by 20% by 2025.

The fund has already reduced the carbon intensity of its portfolio by around 40% between 2013 and 2019.

The FRR’s commitment is to further reduce the carbon footprint of its equities, corporate bonds and real estate portfolios in developed markets.

The FRR has declared that it is a signatory of the Net Zero Asset Owner Alliance, whose members by 2025 must publicly announce their emissions reduction target. The FRR has 26.3 billion euros ($ 30.5 billion) in assets.

Separately, on Monday, a group of listed UK companies, which included fund managers such as Legal & General Investment Management and Aviva Investors, called on the UK government in a letter to require large companies to disclose net zero transition plans with a clear timetable for implementation.

Commenting on the engagement, Michelle Scrimgeour, CEO of LGIM, said in an emailed comment: “As long-term investors, we play a central role, not only in decarbonizing investment products for on behalf of our clients, but also by influencing the transition to the real economy by engaging with and holding companies accountable for their net zero transition plans. “

“We need to see substantial changes in economies and society globally to achieve this goal. While there is clear progress in many areas of the industry, it will not be enough and we support the government. in its goal of raising standards across the market, “she added.

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