04 Pension Protection Fund Climate Change Report 2021/22 Key achievements Addressing climate change through best practice is a priority for the PPF. We continue to evolve our strategy and actions to monitor, manage and ultimately reduce the carbon emissions connected to our investments and our own operations. In this way, we strive to reduce the risk that climate change presents to our members’ future 昀椀nancial wellbeing – and steer all our investments to support a Net Zero world. Governance and Committed to developing a holistic Accepted by the Financial Reporting Introduced new company voting Reported climate-related risks through Created clear commitment accountability sustainability strategy as part of the Council (FRC) as a signatory to the UK guidelines for climate change monthly dashboards to our CIO and to and oversight of action to PPF’s new Strategic Plan Stewardship Code 2020 through quarterly dashboards to our reduce climate-related risks Investment Committee on behalf of our members See page 09 See page 09 See page 07 Strategy and risk Updated our climate policy and tools to re昀氀ect Conducted a Net Zero alignment project across our Transitioned to our new equity benchmark to drive Acted to reduce exposure management scenarios for global action to limit warming to complete portfolio to assess our alignment with a signi昀椀cant reduction in the carbon exposure of our to climate risks across our 1.5°C rather than 2°C the Paris Agreement and identify highest priority equity mandates, especially passive ones portfolios to safeguard our engagement targets members’ future 昀椀nancial wellbeing See page 10 See page 12 See page 16 Engagement and Helped to develop a cross-body Actively participated in a working Participated in CA100+, the biggest- Encouraged to see a number of our Continued to support and collaboration industry-standard TCFD template for group for the newly launched IIGCC ever investor engagement initiative external fund managers joining the encourage industry best managers to report carbon emissions Net Zero Stewardship Toolkit to which we are a signatory, which Net Zero Asset Managers initiative – practice to protect the long- to clients saw over 50 per cent of targeted 25 per cent have committed so far term interests of our members companies committing to Net Zero and nearly 75 per cent aligning their See page 11 See page 15 disclosures with TCFD during the year Disclosure Began reporting against the Greening Expanded the range of TCFD- Started requiring basic climate data Shortlisted for the Pensions for Ensured we share as deep Government Commitments on our related metrics on which our from our Alternatives managers and Purpose Paris Aligned Awards for the an insight as possible of the 1 operational environmental impact Liquids managers report to us introduced key ESG risk analysis Best Climate Governance and Strategy climate exposures we face Statement in November 2021 to provide transparency for See page 30 and our 2021/22 Annual See page 10 See page 10 our stakeholders Report & Accounts 1 ‘Liquids’ refers to Global Credit, Public Equity, Absolute Return, Emerging Market Debt and Strategic Cash. All of these, apart from Strategic Cash, are managed externally.