The GEAPS Pension Scheme’s recently published ‘Climate Disclosure Report’ for the year to 31 March 2025 outlines its approach to managing climate-related risks and opportunities.
Strategic Focus on Climate-Aligned Corporate Bonds
The Scheme has set a target for 60% of its listed equity and corporate bonds, by portfolio weight, to have set science-based targets (SBTs) by 31 December 2027. As of 31 December 2024, 35% of the Scheme’s corporate bonds had set SBT targets. This target is forward-looking and aims to align the Scheme’s assets with a 1.5°C pathway, thereby reducing exposure to climate transition risks and supporting collective action towards the Paris Agreement goals. The Trustee intends to consider introducing a stronger climate focus within its listed equities (upon re-introduction) and corporate bonds, and will engage with underlying investment managers to improve data quality and coverage. (Source: Climate Disclosure Report, pages 21-22)
Illiquid Assets: Reduced Priority for Climate Action
Due to a current overweight allocation to illiquid assets (private equity, private credit, long lease property, and opportunistic credit) relative to the strategic allocation, the Scheme has halted new commitments to these asset classes. The Trustee views this portfolio as a lower priority for climate actions compared to other portfolios, given the limited availability of meaningful climate data from most investment managers in these areas. The allocation to illiquid assets is expected to decrease over time. (Source: Climate Disclosure Report, page 20)
Fiduciary Manager Engagement for Data Improvement
The Trustee is encouraging its Fiduciary Manager, State Street Investment Management, to continue working with illiquid asset managers to provide more complete climate information in future periods. Additionally, for corporate bonds, the Trustee has requested the Fiduciary Manager to engage with managers to improve the quality of reported data to better assess climate risks and opportunities. (Source: Climate Disclosure Report, pages 20-21)
No Significant Changes to Overall Investment Strategy
The Trustee notes that its investment strategy, agreed with the Guarantor, is constructed to achieve its objectives, with a large proportion of assets held in government bonds and equivalent derivative-based holdings for risk management. The Trustee does not intend to change key strategic measures in place as a result of its review of collected metrics. (Source: Climate Disclosure Report, page 17)
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