Climate Progress Report

How we’re addressing climate change in your pension investments

Your pension savings are affected by climate change. It presents financial risks and opportunities for the companies we invest your pension savings in, as well as the wider economy we rely on. That's why we consider climate in our investment decisions and work with companies, industry, and policymakers to support the transition to a low-carbon economy.

We report on our progress each year. Our Climate Progress Report aligns with the Taskforce on Climate-related Financial Disclosures (TCFD).

Download our Climate Progress Report

Our 2026 Climate Progress Report covers the Scheme year April 2025 to March 2026.

Read the full report

Woman hiking with a child in a backpack carrier overlooking a countryside valley

2026 Climate Progress Report

This year, we've seen encouraging progress across several climate measures:

More companies we invest your pension savings in now have independently validated climate targets.
The carbon footprint of our main investment fund reduced by 1.5%.
We introduced new investment managers and strategies that better embed climate into investment decisions.
We introduced a bold new climate approach.
We’re encouraging the heaviest-emitting companies we invest in to improve.

Report archive

Climate Progress 2025-2026

We're continuing to integrate climate considerations across your investments and monitor the progress we're making over time. Here are some key developments and climate measures from the year.

Line graph showing the percentage of companies with science-based targets in two investment funds from 2022 to 2026. The Global Investment (up to 85% shares) Fund increased from 31% to 48%, while the Pre-Retirement Fund increased from 4% to 45%.

More companies have credible climate plans

One way we track progress is looking at how many of the thousands of companies we invest in have emissions reduction targets validated by the Science Based Targets initiative (SBTi). We want to see this increasing over time. These independently assessed targets show whether a company has a credible plan to reduce emissions.

New investment managers and their approach to climate

Investment managers make day-to-day decisions about how your savings are invested, so it's important that climate considerations are built into their approach.

We recently appointed new investment managers Amundi, Invesco and Robeco, which are more closely aligned with our responsible investment approach. Working together, we developed investment strategies to more actively consider climate in investment decisions.

Our bold new climate approach

Our new approach focuses on delivering better long-term financial outcomes for your pension savings while driving decarbonisation. It includes a move away from a 1.5°C top-down target so we can better invest in companies that are leading the climate transition.

See our new Climate Change Position Paper.

Encouraging the heaviest emitting companies to improve

Some companies produce significantly more emissions than others. Many operate in sectors such as power generation, materials and transport that are critical to the transition to a lower-carbon economy.

We believe investors can help drive change by engaging with companies and encouraging them to strengthen their climate plans. That's why we pay particular attention to the highest-emitting companies in our portfolio.

Here’s how it works: Investing in companies gives us shareholder rights. Our investment managers use these rights on our behalf – meeting with companies, raising their standards, and voting at shareholder meetings.

This year our investment managers have been driving change by, for example:

Working with a utility company to set methane reduction targets.
Encouraging a materials company to invest in low-carbon tech and carbon capture.
Voting against the board of a utilities company at a shareholder meeting – over concerns it was not planning to phase out thermal coal quickly enough.

The table below shows the 10 highest-emitting companies we held in our investments as of March 2026 and whether they’ve set science-based emissions reduction targets yet.

Rank	Company	Sector	Have they set a science-based (SBTI) target to decarbonise yet?
1	Korea Electric Power	Utilities	✕
2	Cemex	Materials	✓
3	Holcim Ltd	Materials	✓
4	Gerdau	Materials	✕
5	Southern	Utilities	✕
6	Enel	Utilities	✓
7	Sibanye Stillwater	Materials	✓
8	Duke Energy	Utilities	✕
9	Evergreen Marine Corp	Industrials	✕
10	SSE	Utilities	✓

Even small improvements with these companies will influence a large share of global emissions.

Frequently asked questions

We measure our climate progress regularly and report on it at least once a year, in our Climate Progress Report. This is a report that the Department for Work and Pensions requires us to publish. It’s aligned to the Taskforce on Climate-related Financial Disclosures (TCFD).

We use climate metrics to measure progress, for example:

Portfolio alignment: Over time we want to see that more of the companies we invest your pension savings in are aligned with net zero.
How exposed the companies we invest your savings in are to the risks and opportunities of the low-carbon transition: We measure how well our investments are protected from the risks, and how well-positioned they are to take the opportunities.
Total emissions and carbon footprint: We want to see the carbon footprint of our investment portfolio generally trending downwards over the long term, although it may go up in the short term.

See the Metrics and Targets section of our Climate Progress Report for more information.

Investing your pension savings in companies makes us shareholders and bondholders. This gives us a say in how these companies are run. We encourage these companies to improve on climate, and in general – to make them a better investment all round.

We do this through our investment managers, who meet with company leaders, set standards and targets for them, and vote at shareholder meetings to hold them to account. We, in turn, hold our investment managers to account for how they influence these companies. See examples of your pension in action.

No. We factor climate into our investment to make sure we can better protect and grow your savings over the long-term. If we ignored climate risks and opportunities in our investments, this would likely lead to bad long-term returns. There’s more information about this on our Priority Themes page and Responsible Investing page.