Task Force on Climate-related Financial Disclosures (TCFD)

Climate change is a hugely important issue for our employers and members and presents a real risk to the future investment returns of the fund. Whilst LGPS funds are not required to publish a Task Force on Climate-related Financial Disclosures (TCFD) report Shropshire County Pension Fund has taken the stance of voluntarily producing a TCFD report annually since 2020 alongside its climate risk report, as this is considered a blueprint for best practice in the investment industry.

Its publication follows an independent and in-depth review of the climate risks of the fund’s investment portfolio and is reviewed and published annually.

The latest report at November 2024 shows solid progress against a number of important measures:

1. That the fund’s equity portfolio is 65.2% lower than its blended benchmark for financed emissions  and despite increasing equity holdings and seeing values increase 66.3% since 2019 the Fund has seen a real reduction of 34% since the 2020 report.
2. The fund’s equity portfolio is 68.5% below its blended benchmark for normalised finance emissions (Emissions per £1m invested).
3. The fund’s equity portfolio is 57.3% lower than its blended benchmark in respect of Weighted Average Carbon Intensity (WACI). This means that, on average for every $m of economic output companies produce, the fund’s investee companies emit 57.3% fewer greenhouse gas emissions than companies in the blended benchmark.

The reports also illustrate the impacts of engagement on the total equities’ portfolio with the number of companies aligned to the Paris Agreement increasing from 28.4% to 39.1% since the previous report.

The report demonstrates a strong direction of travel in line with the fund’s agreed Climate Strategy.