The Pension Insurance Corporation (PIC), an insurer of defined benefit pension schemes, announced today new sustainability commitments, including pledges to achieve net zero carbon emissions across its £50 billion investment portfolio by 2050, as well as an interim target to achieve carbon neutrality in its operations under Scope 1 and 2 emissions by 2025.

 In addition, the company announced membership in the UN-convened Net-Zero Asset Owner Alliance (AOA), an international coalition of institutional asset owners, representing nearly $5 trillion in AUM, committed to transitioning their investment portfolios to net-zero GHG emissions by 2050. PIC will be joining AOA’s Inaugural 2025 Target Setting Protocol, with a commitment to publish interim carbon-reduction targets every five years. 

Tracy Blackwell, CEO of PIC, said:

 “The response by government and asset owners to climate change is one of the defining issues of our age. PIC recognizes the urgency of curbing global warming in line with the Paris Agreement and we are proud to join with dozens of other institutional investors through the AOA to help that effort. We fundamentally believe that achieving net zero is the right thing to do both for society and our policyholders as we fulfill our purpose over the coming decades.”

According to PIC, the company’s net zero commitments align with its purpose to pay the pensions of its current and future policyholders, by ensuring that its portfolio is more resilient to the economy’s transition to net zero, while supporting efforts to curb climate change. PIC plans to continue the decarbonisation of its portfolio in anticipation of a rapid economic transition away from carbon fuels, and will actively finance the transition economy by investing in firms which are aligned to its decarbonisation goals.

PIC stated that it already has more invested in renewable energy than in oil and gas, and has put in place several ESG restrictions on its asset managers, including plans to divest its holdings in coal extraction or burning  and tar sands by 2025, as well as plans to divest oil and gas holdings in the future.

Blackwell added:

“Companies which actively demonstrate their commitment to sustainability are better placed to maintain secure long-term cash flows. As a long-term business we want to support the government in managing this long-term goal, benefitting our policyholders, employees, wider society, and other stakeholders.”