The FirstGroup Pension Scheme, in its recently published Taskforce on Climate-related Financial Disclosures Report for the year ending April 5, 2025, details significant adjustments to its investment strategy and climate-related targets following a scheme merger on May 31, 2024.
Bus Section Divests Illiquid Private Markets Infrastructure Debt, Plans Asset-Backed Securities Investment
For the fiscal year ending April 5, 2025, the Bus Section of the FirstGroup Pension Scheme terminated a private markets infrastructure debt mandate. The rationale for this decision was the challenging nature of ESG integration due to the illiquidity of the holding. This divestment is intended to increase flexibility within the portfolio. The Trustee subsequently agreed to invest in an asset-backed securities mandate, which was implemented post-reporting period. The Trustee plans to assess climate-related investment opportunities during its next investment strategy review in 2025-2026. (Source: Taskforce on Climate-related Financial Disclosures Report, page 7)
Group Section Allocates 10% to Asset-Backed Securities, Appoints Manager
In November 2024, the Group Section of the FirstGroup Pension Scheme, in conjunction with the Bus Section, agreed to a 10% strategic allocation to asset-backed securities (ABS). This decision was made to diversify the Scheme’s liquid credit holdings. In April 2025, the Trustee appointed an investment manager for this mandate. The asset transfer to support the ABS investment was completed in May 2025, funded by a partial disinvestment from the Section’s short duration credit allocation. (Source: Taskforce on Climate-related Financial Disclosures Report, page 7)
Bus Section Sets New Emissions Coverage Target for 2025
For the fiscal year ending April 5, 2025, the Bus Section of the FirstGroup Pension Scheme established a new target to increase reported/verified Scope 1 & 2 emissions coverage to 70% of total portfolio emissions by December 31, 2025. This represents a 12% increase from the 58% coverage reported on December 31, 2023. As of December 31, 2024, the reported/verified emissions coverage was 48%. The Trustee aims to make progress towards this target through manager engagement and strategic changes, acknowledging limitations due to the illiquidity of some mandates. (Source: Taskforce on Climate-related Financial Disclosures Report, page 28)
Group Section Adopts 90% Emissions Coverage Target for 2025
For the fiscal year ending April 5, 2025, the Group Section of the FirstGroup Pension Scheme set a target to increase reported and verified Scope 1 & 2 emissions coverage to 90% of total portfolio emissions by December 31, 2025. This target is based on a baseline of 85% coverage as of December 31, 2024. The Trustee intends to achieve this target through engagement with its investment managers to improve reporting. (Source: Taskforce on Climate-related Financial Disclosures Report, page 28)
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