On the go: A group of pension executives has challenged companies to engage with their stakeholders and intensify their efforts to reach net zero emissions.
The statement came in a letter to the Financial Times, signed by leaders from across the defined benefit and defined contribution spaces, Local Government Pension Scheme funds and private plans who are collectively responsible for more than £675bn in assets.
Brunel Pension Partnership’s chief responsible investment officer Faith Ward, Nest’s chief executive Helen Dean and BT Pension Scheme Management’s CEO Morten Nilsson were among the signatories.
“Long-term value is most reliably generated by companies led with a clear sense of purpose that guides their strategy and informs their values,” the letter stated.
“We believe that the growing emphasis being placed by companies on sustainability, and the drive to net zero, needs to intensify.”
The letter responds to criticism of stakeholder capitalism as “woke”, describing strong engagement over sustainability as “a powerful form of capitalism that unleashes mutually beneficial relationships to create long-term value”.
“Moreover, it is only by honestly engaging with the full range of stakeholders — including consumers, employees and shareholders — that value can be sustained over the long run,” it added.
Schemes themselves are coming under greater pressure to slash their emissions and improve the way they disclose their climate targets.
The Department for Work and Pensions has proposed that trustees be forced to report on a new “portfolio alignment” metric, designed to inform scheme members of the extent to which their portfolios line up with Paris Agreement targets.
The portfolio alignment metric would be put “on a statutory footing” as a fourth metric to be incorporated in schemes’ Task Force on Climate-related Financial Disclosures reports.
