Scientists are clear on the need for businesses to reduce carbon emissions. We have aligned our commitments and activities with the 2015 Paris Agreement’s goal of limiting global warming to 1.5ºC . Our key areas of focus are those most relevant to the nature of our business – climate investment, effective governance and data collection.

Our progress so far

Climate Disclosures

Although we are not yet required to report against the Task Force on Climate-related Financial Disclosures (TCFD) recommendations, we have already volunteered to publish our first ever climate disclosures. These outline the actual and potential impacts of climate-related risks and opportunities on our business, and how we will manage them.

“We are still relatively early in our sustainability journey, but we are proud of the progress we have made. We recognise that we have an impact on the environment, communities and members we serve, and we are committed to minimising this impact through responsible practices and innovative solutions.” Will Wynne, Managing Director.

Data collection and transparency

We initially measured our carbon footprint in 2021, and found that there were various ways in which our data collection could be improved. We went on to measure our operational carbon footprint and Scope 3 emissions for 2022, this time ensuring to:

• Collect more precise data relating to business travel, by collaborating with our travel provider. 
• Expand the breadth of our Scope 3 data to include our technology platform. This means our reported Scope 3 emissions are likely to increase in the next reporting period.
• More accurately measure our energy usage, by working closely with our landlords.

Definition:
Scopes 1, 2 and 3 are a means of classifying the different types of carbon emissions a company creates in its operations, and in its wider value chain. Scopes are the basis for mandatory Greenhouse Gas (GHG) reporting in the UK.

Scope 1 emissions

This includes the GHG emissions that a business directly creates from owned or controlled sources, for example running boilers and vehicles.

Scope 2 emissions

This includes the GHG emissions created indirectly from the generation of purchased electricity or energy.

Scope 3 emissions

This includes all indirect emissions associated with the company’s value chain, for example products bought from suppliers and emissions from a customer’s use of its products.

Source: https://ghgprotocol.org/sites/default/files/standards/ghg-protocol-revised.pdf

The Smart Building

In 2021, we relocated our global headquarters in London from a private office space in a shared building to our own premises, The Smart Building. The result has been a reduction in our energy consumption of 71.8%, thanks to The Smart Building’s use of 100% renewable energy sources, WiredScore ‘Gold’ certification and WELL-ready status.

Smart Pension Master Trust

Pension savings have the power to contribute to major issues like tackling the climate crisis and improving healthcare. We are putting our investments to work, with our auto enrolment master trust in the UK committed to not only good financial returns but also beneficial societal and environmental outcomes. Our master trust is committed to:

• Being net zero in our default growth fund by 2040 (10 years ahead of the 2050 target outlined by the Paris Agreement). This is where over 80% of our assets are invested. 
• A 50% reduction in scope 1 and 2 emissions from 2019 levels by 2025 (which was achieved at the end of 2022).
• A new interim target of a 75% reduction in emissions from 2019 levels by 2030.
• Investing in innovative asset classes, including impact and private markets.
• Offering sustainable investment funds for our members: the Smart Sustainable Growth Core Fund, the Smart Sustainable Growth Fund (default growth fund) and the Smart Sustainable Growth Plus Fund.
• Collecting data and working with third parties to analyse investments in relation to climate-related risks and opportunities.

Our goals for 2023 and beyond‍

We are committed to:

• Disclosing our carbon emissions data and continuing climate reporting annually.
• Refining our reporting in the years ahead, as our understanding of climate-related risks and opportunities evolve.
• Removing commodity-driven deforestation from our default growth fund and taking into account nature-related risks such as biodiversity loss.
• Encouraging other companies to take action by continuing to role model voluntary climate disclosure and carbon reduction initiatives. 
  

Our operational scope 1 and 2 emissions

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Our operational scope 3 emissions

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