The Scheme’s money is invested to ensure it is able to pay the members and their families their promised benefits, now and in the future. To meet this objective the Trustee considers Environmental (including Climate Change), Social (including human rights and diversity and inclusion) and Governance (including ethical corporate behaviour) factors as financially material risks to the Scheme.
Our commitment to net-zero by 2050.
The scheme and its members
The Tesco PLC Pension Scheme has around 345,000 members, including over 75,000 who are currently receiving their pension. The Scheme has total investments worth more than £20bn.
In 2015, our ‘defined benefit’ scheme was closed to new members and the future build-up of further pension benefits. Since November 2015, colleagues have been saving for their retirement through the Tesco Retirement Savings Plan - which is a ‘defined contribution’ scheme.
Supporting the global aim to reduce carbon emissions
Delivering members’ pensions is our key priority. But we can also play our part in supporting the aim of a low-carbon world, to help reduce global warming.
The Scheme owns a wide range of investments around the world in company shares, government and company bonds, property and infrastructure. These include investments that support climate change transformation such as renewable energy, like solar and wind energy, and innovations that help companies and others to create a more sustainable and cleaner planet.
In delivering members’ pensions, the Scheme uses its influence and scale for good. It is able to provide capital to fund the cost of climate change transformation and, by talking to the businesses in which it invests, to encourage them to reduce their greenhouse emissions over an appropriate period of time. Selling its investments simply because they are carbon-intensive isn’t the first choice, but the Scheme will sell investments in those companies that fail to engage with our long-term goals.
Investing pensions responsibly
As the Trustee, we invest the Scheme’s money to get the returns needed to meet our key priority to pay pensions and other benefits to our members. We also recognise the need to invest responsibly and, in doing that, we consider the opportunities and risks that influence the value of the shares in the businesses and other investments the Scheme makes.
These include:
- Environmental factors, such as climate change and pollution
- Social factors, such as human rights, company practices and modern slavery
- Governance and the proper running of businesses by their board of directors
Through our investment managers, we carefully consider the investments we make. We also encourage our investment managers to adopt good practices and policies to support financially-sustainable businesses that generate the returns the Scheme needs - in a cleaner, healthier and better global environment.
Our commitment to being a net-zero scheme
The average carbon emissions of the companies within the Scheme’s global equity portfolio are already much lower than the average emissions of companies within the commonly used global equity indices. Our aim is for the Scheme’s portfolio of assets to have net-zero carbon emissions by no later than 2050. This commitment is in line with the Paris Agreement, which aims to limit global warming to well below two degrees Celsius.
Using science-based targets, we will regularly review our target date and set milestones towards our net-zero target.
The future
A survey of those in Tesco, saving for retirement, told us that investing responsibly means:
- Protecting People’s Rights
- Working Towards a Better Society
- Protecting the Planet
The Trustee of the Tesco PLC Pension Scheme will continue to invest responsibly over the long term, to deliver our members’ benefits while also contributing, as part of that, to a better and more sustainable world.
Statement of Investment Principles.
Implementation Statement.
The Implementation Statement sets out how the Trustee is meeting their commitment to Responsible Investment.
Climate Change Report.
This report provides an update on the progress the Trustee has made towards meeting their aim for the Scheme's assets to be Net Zero carbon emissions by no later than 2050. And how they are improving and increasing the monitoring and reporting of climate-related financial information, including climate-related risks and opportunities.
Stewardship Reports.
Stewardship means looking after the Scheme's investments responsibly to help protect and grow the money that will pay members' pensions, both now and in the future. Stewardship is an important priority for the Scheme.
We’ve prepared this update to highlight the Stewardship activity we've carried our in the Scheme year. We've also included an update on our more recent activities and our priorities for the future.