04 Pension Protection Fund Climate Change Report 2022/23 Key achievements Addressing the risks and opportunities arising from climate change is key to our responsible investment and organisational goals. Utilising a sustainability lens has enhanced our decision-making by providing us with an alternative way of considering risks and bene昀椀ts that we may face, whether in relation to our investment portfolio or within our own operations. Governance Created a new steering group Provided ongoing training and Enhanced our voting guidelines with Maintained our signatory status under Created clear commitment and accountability to govern and oversee our new education to upskill our Board, additional expectations for companies’ the FRC’s UK Stewardship Code 2020 to and oversight of action to Sustainability Strategy Executive Committee and climate strategy and management reduce climate-related risks Investment team on behalf of our members See page 07 See page 09 See page 09, Appendix F Strategy and Introduced our new Sustainability Demonstrated continued progress Created a new Climate Watchlist to CIO Asset Owner Industry Innovation Acted to manage exposure risk management Strategy – two key goals are focused on our Paris Portfolio Alignment address the companies contributing Awards 2022: Winner for E昀昀orts in to climate risks across our on integrating climate-related risks assessments, increasing our Fund’s to over 70 per cent of our material ESG and IPE Best UK Pension Fund; portfolios and our business into the strategy (our investments exposure to Aligned assets and 昀椀nanced emissions Joint Winners to safeguard our members’ and our operations) reducing the allocation to Not Aligned future 昀椀nancial wellbeing See page 11 See page 13 See page 16 Engagement Began embedding our sustainability Collaborated with our external Developing targeted engagement Successfully engaged with a number Continued to support and and collaboration considerations across the organisation, consultant to enhance our Real Estate action plans for each company on of our holdings to encourage CDP encourage industry best led by our six sustainability portfolio’s alignment methodology the Climate Watchlist disclosure, as part of the CDP practice to protect the working groups Non-Disclosure Campaign long-term interests of our members See page 11 See page 32 See page 16 See page 17 Disclosure Further evolved sustainability reporting Obtained valuable ESG and climate Expanded our 昀椀nanced emissions Paris Alignment Awards 2022: Shared as deep an insight as on our operational impacts, including disclosures from our Private Markets reporting to include Scope 3 emissions Shortlisted for Best Climate Change possible into our exposure Scope 2 market-based emissions managers participating in the eFront and EM sovereign emissions Member Communication and Best to climate change within our to re昀氀ect 100 per cent renewable ESG Outreach pilot project Climate Change Policy Statement investments and our operations electricity use to provide transparency for our stakeholders See page 35 and our 2022/23 See page 18 See pages 23–24 Annual Report & Accounts