Three quarters of pension schemes have adopted net zero targets, with more schemes than ever taking action to address climate risks, says XPS Group.
Analysis from the consulting and administration group showed the number had risen from 60% last year.
Of these, 75% have indicated clear plans aligned to best practice, suggesting that both uptake and credibility has improved amongst the schemes, XPS said.
The analysis was taken from 48 UK pension schemes’ Task Force on Climate related Financial Disclosure reports, covering around £400 billion of assets under management.
The findings showed nearly seven in 10 (69%) have made asset allocation changes to address climate risks, a significant increase on previous years, while 42% of all schemes reviewed indicate at least some direct investment in climate solutions.
XPS said 2025 has seen governments, companies and asset managers pull back on ESG and climate change targets, making it more important than ever for pension schemes to review their exposure to these risk issues.
Alex Quant, head of ESG research at XPS Group, said: “These findings highlight the significant strides pension schemes are making towards net zero targets. It’s good to see more pension schemes having clear, actionable plans focussing on forward-looking alignment to the climate transition.
“Given the recent significant setbacks for the low carbon transition at government and industry level, we urge trustees to take the time to fully understand the risks and opportunities they are exposed to.”
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