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AUM in Action

PPF Creates ‘Climate Watchlist’ to Tackle Financed Emissions

The UK’s Pension Protection Fund (PPF) has introduced a ‘Climate Watchlist’ to address the companies that contribute to more than 70% of the organisation’s material financed emissions. Established in 2005 by the UK government, the PPF protects defined benefit pension employees when an employer becomes insolvent. It currently has 295,000 members and more than £32.5 billion (US$39.5 billion) in AUM. PPF said the watchlist aims to encourage investee businesses to contribute to a more sustainable future and engage with almost 700 companies on specific ESG issues and objectives. Eighty-seven companies – predominantly based in the US and Asia Pacific – in material sectors account for the majority of the PPF’s financed Scope 1 and 2 emissions. In addition to engagement, PPF has developed an escalation strategy for the watchlist to be deployed when engagements are either “failing or progressing too slowly”. Barry Kenneth, CIO at the PPF, said: “The development of our Climate Watchlist is a huge step forward for us to focus our efforts on our most emitting investments”. The watchlist was released as part of the PPF’s fourth Responsible Investment report, which it says highlights its “continued commitment” towards the integration of material ESG risks into its investment approach. The report saw PPF heighten its industry initiative involvement across topics including modern slavery, high quality reporting, and mental health. It also enhanced its voting guidelines, introducing additional expectations for companies’ climate strategy and management.  

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