Dalriada aims for net zero pension schemes by 2040 where it is sole-trustee

With interim targets of a 25 per cent reduction by 2025 and a 60 per cent reduction by 2030, the professional trustee firm’s decision announced today would impact around £5bn of assets across 80 schemes.

Where possible, it said it would use a baseline period of the first quarter of this year, although it stressed this may not always be possible due to differing pension scheme year-ends and incomplete data.

Dalriada said any future sole trustee appointments would also be brought within the umbrella target, and that it plans to encourage and initiate discussion on such goals within schemes where it acts as co-trustee.

Speaking to Professional Pensions, Dalriada director responsible for investment David Fogarty said that the policy was a development on top of mandatory climate risk reporting guidelines for £1bn-plus schemes that came into force earlier this month.

“The regulations mean we could deal with one scheme in one way and another scheme in a different way but we have the same duty in a scheme below the [£1bn] threshold as we do above,” he said. “It might make the world less complicated but it is meant to be the lowest bar. We want to have a higher standard so it is not at all surprising that we end up with something that has more depth to it than perhaps what the regulation might be.”

Professional trustee Jessie Wilson added: “Climate change risk is significant for schemes and therefore we are going to take a stand and get things going. We are going to see a lot more coming out of the regulator but we are going to get started now.”

The UK’s hosting of COP26 was adding “more urgency at a country level, which will then filter through the economy increasingly quickly”, she said, explaining the firm’s “ambitious” target which seeks to balance cost effectiveness, realism and product availability.  

But she urged asset managers and consultants to help improve data and action. “We really do need to rely on them to both come up with solutions and do it in a cost-effective way as it goes through the system,” said Wilson. “We don’t want the costs with ESG implementation to fall on schemes. It is about sharing the burden. If there is clear data available, why should this not be standard reporting? That is something we would love to see.”

Dalriada’s parent company 3173 has also committed to meeting these standards across all of its group companies, which include Spence & Partners, Mantle Hosting and Mantle Services.

The scale of the rollout is not overlooked by Williams, however. “It’s always going to be a real moving challenge but that’s not going to stop us getting started,” he said.

This article originally appeared at Professional Pensions.