Universities Superannuation Scheme, London, intends to reduce the carbon intensity of its portfolio to zero by 2050, by divesting certain holdings.
USS Investment Management, the in-house manager of USS, is developing a strategy and short-term targets that will help the fund to reduce its carbon footprint, a spokeswoman confirmed Tuesday. USS IM will work with teams internally to select companies and assets to be divested.
The pension fund also plans to review and potentially change benchmarks so that they factor in carbon emissions. It will also continue to develop its portfolio of low-carbon investments, which has £1 billion in assets and invests in renewable energy.
"We recognize that this transition will not be easy, but rather than the scheme buying carbon offsets, we have work to do to establish meaningful short, medium, and long-term targets and milestones on our journey to net zero," said Simon Pilcher, CEO of USS Investment Management, in a news release Monday. "We now look forward to engaging further with policymakers and our investments in order to make this ambition a reality by 2050, if not before."
The £68 billion ($93.9 billion) pension fund said last June that within two years it would divest any investments linked to tobacco, cluster munitions and landmines as well as companies that derive 25% of revenues from thermal coal from its portfolio in efforts to improve the environmental, social and governance profile of its assets.
Separately, Nordea Life & Pension said Tuesday it is imposing a new requirement on its money managers to commit to a net-zero target in 2024.
Nordea Life & Pension, which has €62 billion ($74.5 billion) in assets under management, wants to reduce the carbon intensity of its portfolios by at least 25% by the end of 2024.
"We are now requiring asset managers to have committed to a net zero target in line with a 1.5-degree scenario no later than in 2024 to be able to manage assets on behalf of Nordea Life & Pension's customers," Katja Bergqvist, CEO of Nordea Life & Pension, said in a news release.