Macquarie and BT Pension push TPI support past $20trn

16 October 2020

Membership of the Transition Pathway Initiative (TPI) has surged past the $20 trillion milestone, just over three years after it was launched.

The TPI said the BT Pension Scheme – the largest defined benefit corporate pension scheme in the UK, with over £55 billion ($71 billion) in assets – and Australian investment bank Macquarie were among the most recent new members.

The new additions take the total TPI members to over 80, with around $22 trillion in combined assets under management. Other supporters include asset managers Schroders, BNP Paribas Asset Management and DWS as well as pension funds Brunel Pension Partnership, CalPERS and AP7.

Launched in January 2017, the initiative started with just 18 members with a combined £2 trillion in assets.

The TPI assesses how prepared companies are for the transition to a low-carbon economy, referencing the goals of the Paris Agreement.  Using forward-looking carbon performance assessments, the publicly available TPI tool measures the company pathways to meetings these goals. The TPI scooped the ESG assessment tool of the year award at the Environmental Finance Sustainable Investment Awards 2020.

“Passing the $20 trillion milestone is significant and shows that TPI is rapidly becoming the world’s leading gauge of corporate progress on the low-carbon transition,” TPI co-chair and Brunel chief responsible officer Faith Ward told Environmental Finance.

“TPI is committed to providing investors with comprehensive, rigorous and impartial climate data on some of the world’s highest emitting listed companies and that is becoming an ever-more critical part of mainstream investment risk management as the climate crisis continues and the world prepares for next year’s COP26 climate summit,” she added.

In January, the £2.8 billion Church of England Pensions Board launched a first-of-its-kind, custom-made, climate transition index based on TPI data.

The FTSE TPI Climate Transition Index was launched by the CofE Pensions Board in collaboration with the index maker FTSE Russell – part of London Stock Exchange Group – and the TPI. Earlier this month, the pension fund finalised the allocation of £600 million of its assets to the fund tracking the index – resulting in the fund no longer holding any investments in US oil supermajor ExxonMobil.

Also earlier this month, the TPI reported that none of the major European oil and gas firms had aligned their emissions pathways to Paris – despite a number of them making dramatically strengthened climate pledges in recent months.

The TPI assessed 59 of the largest listed oil and gas and coal energy firms in Europe and found none were on track to align their emissions to a 2°C climate pathway by 2050. Three of these firms – Royal Dutch Shell, Eni and Total – were described as “getting closer” to a 2°C climate pathway, but needed to put additional measures in place to achieve this.