Helping UK pension schemes with ESG and Climate risk
Two powerful solutions that help UK pension schemes independently understand their ESG and Climate Risks to meet regulatory obligations and protect member pension pots
Regulatory focus is driving increased pressures on sustainable governance for asset owners
October 2020 onwards
Trustees are required to disclose financial material considerations towards ESG and Climate Change. Implementation statements require information on how trustees acted on the sustainable principles set out in the SIP
Pension Schemes Act 2021
The Pension Schemes Act 2021 introduces new governance and reporting requirements for pension schemes in relation to climate-related issues. The reporting requirements are based on the Task Force on Climate Related Financial Disclosures (TCFD) recommendations.
From 1 October 2021, master trusts and pension schemes with £5bn of assets have a legal duty to report on the financial risks of climate change in their portfolio. Pension schemes with £1bn+ in assets must meet the same requirements from 1 October 2022.
All-round sustainable governance
Our solutions empower our pension schemes clients seeking sustainable governance solutions to independently navigate, report and monitor their ESG and Climate risks
TCFD-ready climate risk reporting
Your carbon emissions covered
Total Carbon Emissions (total greenhouse gas emissions attributable to a pension scheme’s portfolio)
Carbon Intensity Metric (taking the carbon intensity of each company in a pension scheme’s portfolio and weighting it based on holding size)
Scope one, two and three covered
Scope 1: All emissions from a company or under their control, such as facilities, manufacturing processes or vehicles
Scope 2: Indirect emissions incurred from electricity purchased and used by a company
Scope 3: Other indirect emissions from activities of a company arising from sources that they don’t own or control.
Your carbon emissions dashboard
We provide you with full access to your TCFD-ready carbon emissions reporting.
Total CO2 emissions
• Overall emissions breakdown by fund or segregated mandate, individual holding and sector
Carbon Intensity Metric
• Overall emissions intensity and breakdown by fund, mandate, individual holding and sector
• Portfolio carbon intensity attribution by fund/mandate and ISIN
• Carbon intensity ranking per ISIN by sector
ESG risk reporting
Our innovative ESG reporting solution for UK pension schemes gets to the core of their ESG risks at total portfolio level, as well as across both pooled funds and segregated mandates.
Leveraging a database of over 20,000 global companies to conduct ESG screening on the underlying companies held within a pooled fund or segregated mandate for their adherence to the 10 principles of the UN Global Compact
Identify UN Global Compact Breaches
We screen 20 controversial sectors that are commonly used as exclusions today. These include companies involved in animal testing, controversial weapons and tobacco.
Your action report
A tailored report provides a comprehensive view of breaches against the 10 UN Global Compact Principles. Levels of exposure are reported at an aggregate scheme level, at a pooled fund and segregated mandate level and at an underlying ISIN code
Data that’s powered by Sustainalytics
Powered by Sustainalytics, a global leader in the provision of high-quality, analytical environmental, social and governance research, ratings and data that covers over 20,000 companies. Sustainalytics brings 25 years of sustainable research expertise with a consistent approach on assessments across the investment spectrum.
Delivering good governance in managing your scheme’s climate and ESG risks
Provides your aggregate exposure on climate and ESG risks across your pension scheme portfolio
Full transparency on the carbon footprint attributable to the pension scheme’s investments
Full transparency on ESG breaches across pooled funds and segregated mandates
Drill down to company level (by ISIN, SEDOL, etc)
Flexibility to monitor exposure to climate and ESG risks on a quarterly, bi-annual or annual basis
Consolidated reporting that is independent of your asset managers and service providers
A flexible plug and play solution that helps you independently strengthen your governance around climate and ESG risks
- Pooled fund look-through For pension schemes investing in pooled funds, we can provide ‘look through’ analysis on climate and ESG risks
- Independent: Schemes benefit from a viewpoint of their climate and ESG risks that’s independent from their asset managers, creating the framework for strong governance
- Deep insight: A tailored report provides schemes with an overview of their breaches across the total portfolio, individual funds/mandates and at underlying ISIN level
- Activate dialogue: More informed insight on climate and ESG risks means schemes can have more precise dialogue with asset managers on how they are navigating those risks
- Putting you in control: You can access both the climate risk and ESG risk reports on one singular digital platform, OLIS, providing a singular point of entry for all our sustainable governance services. This powerful reporting tool puts you in control of how you want to visualise the data
What are the UN Global Compact Principles?
United Nations Global Compact is a worldwide initiative that is built around four core values driving 10 universal sustainability principles. It’s based on the foundation that corporate sustainability starts with a company’s value system and a principles-based approach to doing business – operating in ways that meet fundamental responsibilities in the areas of human rights, labour, environment and anti-corruption.
Adherence to the UN Global Compact principles is a cornerstone for companies practicing good environmental, social and governance practices.
1. Support and respect the protection of internationally proclaimed human rights
2. Make sure that they are not complicit in human rights abuses
3. Uphold the freedom of association and the effective recognition of the right to collective bargaining
4. Elimination of all forms of Forced and compulsory labour
5. Effective abolition of child labour
6. Elimination of discrimination in respect of employment and occupation
7. Support a precautionary approach to environmental challenges
8. Undertake initiatives to promote greater environmental responsibility
9. Encourage the development and diffusion of environmentally friendly technologies
|Anti-Corruption||10. Work against corruption in all its forms, including extortion and bribery|
Explore our ESG resources
What are pension schemes saying about climate risk
We recently surveyed pension schemes about their approach to measuring and managing climate risk. Discover more here.
The CACEIS climate change briefing
Our new podcast series for pension schemes and trustees provides a 360-degree view of climate change, exploring topics such as best practice in reaching net-zero, active engagement and assessing climate risks.
Why does climate risk matter to pension schemes?
We host a webinar with Chandra Gopinathan of Railpen, climate expert Professor Ralf Toumi from the Grantham Institute and Pat Sharman from CACEIS on why climate risk matters to pension schemes.
Dealing with climate risks in pension schemes
Climate change will continue be high on the regulatory agenda and likely to be more so post COP 26 last year. Pat Sharman, Country Managing Director, UK, and a trustee of a small trust-based DC scheme provides a trustee’s perspective.
Our pensions specialists are here to help
Country Managing Director, UK
Pat brings over 36 years of securities services experience and 25 years of experience in working with UK pension schemes, with a dedicated focus on sustainable governance.
Head of UK Pension Sales, UK
James brings over 25 years of securities services experience and also brings deep knowledge of client-driven custody. In addition to partnering with a range of DB and DC schemes, James partners with Local Government Pension Schemes.
Head of Digital and Governance Solutions in the UK
Scott oversees CACEIS’ sustainable governance solutions for UK pension schemes, including cost transparency, ESG look through and climate risk reporting. Scott is also part of the CTI’s Technical Expert Panel, in helping define and drive good governance in the UK Pensions Sector.
Business Development Manager
Michael works with a range of pension scheme clients on our sustainable governance solutions, which include cost transparency and ESG look through, with a particular focus on Master Trusts and Consultants.
Business Development Manager
Henry has a wealth of experience within the financial services industry, focusing on both institutional and private client sectors. In addition to partnering with a range of DB and DC pension schemes, Henry partners with fiduciary managers.