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Border to Coast Climate Change Report highlights £8.3bn of investments that support the Net Zero transition 

  • Progress made against Net Zero commitment
  • Private Markets climate focused investments more than double to £1.4bn
  • Financed emissions fall by 47% compared to 2019 baseline

Following its 2021 commitment to invest to drive the transition to a low carbon economy, Border to Coast Pensions Partnership confirms that it has £8.3bn of investments in climate solutions*.

The company’s Climate Change Report (year ending 31 March 2023) details that £6.9bn** of Equity and Fixed Income assets are in investments aiming to reduce carbon emissions, while its Private Markets deployment in investments that contribute to the transition to a lower carbon economy has more than doubled to £1.4bn (£600m as at 31 March 2022).

“While climate change creates risks to both society and investors, there are also investment opportunities related to the transition to a Net Zero economy. This will require new business models, new companies and new infrastructure, which represent potentially attractive investments. As long-term investors, we are able to support Partner Funds in providing capital to support this transition.”

Joe McDonnell, Chief Investment Officer, Border to Coast

Climate metrics

The company’s report, aligned to recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), provides an update on progress against its Net Zero Implementation Plan. This highlights the positive progress being made:

  • Net zero targets and metrics cover all listed equity and a proportion of the pool’s fixed income assets, accounting for 57% of total assets under management;
  • Engagement is taking place with companies representing 73% of the financed emissions in Border to Coast’s portfolio;
  • A 47% reduction in financed emissions compared to the 2019 baseline. While subject to fluctuations, this is on-target for the targeted 53% drop by 2025;
  • Carbon intensity measures, including weighted average carbon intensity (WACI) and carbon intensity, are 6 – 8% lower than at 31 March 2022;
  • 44% of the financed emissions in Border to Coast’s portfolio are emitted by companies considered to be aligned or aligning with Net Zero.

Just Transition

As part of its investment strategy, Border to Coast is also committed to a just transition, considering social risks and opportunities in investment decision making. In May 2022 the pool joined the Emerging Markets Just Transition Investor Initiative, as a founding member. This group of 12 UK pension pools and funds with assets of £400bn, recognises that different countries and different industries will decarbonise at different paces, warning against a one-size-fits-all approach. It has drafted principles that encourage and articulate the integration of social risks and opportunities into decarbonisation strategies.

Jane Firth, Head of Responsible Investment, Border to Coast, said:

“We have continued our journey to address the carbon footprint of our investments – by identifying and assessing climate risk, adapting our investment strategy, engaging with the companies we invest in, peers and regulators, and transparently reporting on our progress. We are actively managing the risks and opportunities, and are making good progress towards our commitment to Net Zero.”

Case Studies: investments with climate impact

Innovative climate solutions

Border to Coast is invested in Hy24’s €2bn Clean Hydrogen Infra Fund, which focuses on investments across the clean hydrogen value chain, from production and conversion, to storage, supply and usage.

Energy storage

Border to Coast is invested in the Gresham House Energy Storage Fund plc, which funds utility-scale operational battery energy storage systems across Great Britain. It will have over 1GW of capacity by the end of 2023, to help to balance the electricity grid through the accumulation and release of renewable power.

*£6.9bn is based on carbon data supplier MSCI’s definition of climate solutions, which identifies companies offering clean technology solutions, such as the facilitation of renewable energy production. The remaining £1.4bn is based on Border to Coast estimates. 
** The £6.9bn invested in climate solutions represents nearly a third of the £22bn of equity and fixed income assets covered by Border to Coast’s Net Zero Plan.
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