NILGOSC became an official supporter of the Taskforce on Climate-related Financial Disclosures (TCFD) in June 2020. What began as a voluntary set of recommendations (and in fact is still voluntary for NILGOSC) has become part of the regulatory framework in many countries as part of the growing global effort to address climate change.
TCFD developed a reporting framework based on a set of consistent disclosure recommendations, as a means of signatories providing transparency about their exposure to climate-related risks. In alignment with the TCFD recommendations, NILGOSC produced its inaugural Climate-related Disclosures Report for the year ended 31 March 2021. The report is available to review at Climate-related Disclosures Report on the NILGOSC website.
Working alongside a third-party provider, it was possible to analyse 52% of the Funds £9.8 billion portfolio at the financial year end (primarily composed of NILGOSC’s active and passive equity holdings). The portion of the Fund that could be measured, compared favourably to the benchmark comparison (MSCI All Country Word Index): with the total holdings emitting 13% less carbon dioxide equivalents on an absolute emissions level; and reporting a 21% lower weighted average carbon intensity (WACI) than the index. Despite this good news, the figures should be understood in the context that: NILGOSC is a diversified asset owner with investment over many asset classes and geographies, much of which could not be analysed; and the data is extracted from estimated sources as well as reported information. Therefore, NILGOSC will continue to support increased quality and scope of carbon datasets before setting climate targets.
Adopting the recommendations is an iterative process and full implementation can take many reporting cycles. NILGOSC is pleased to have commenced reporting in line with TCFD recommendations and has used its first year of reporting to identify gaps and areas to focus on going forward.