Key Takeaways
- • USS, the UK's largest pension fund, announced interim Net Zero targets for 2025 and 2030 as part of its pursuit of a 2050-or-sooner net-zero goal for its investments.
- • USS committed to halving portfolio emissions by 2030, according to Responsible Investor's headline summary of the announcement.
- • USS launched a new £500m Sustainable Growth private equity mandate, to be invested globally in climate-focused and energy transition funds.
- • The interim targets align with the UN-convened Net-Zero Asset Owner Alliance, of which USS is a member, which set intermediate CO2 reduction ranges of 22–32% for 2025 and 40–60% for 2030 for its signatories.
Summary
The UK's largest pension fund, USS, has announced interim targets for 2025 and 2030 alongside a new £500m sustainable private equity mandate, according to Responsible Investor. The fund's stated aim is to halve portfolio emissions by 2030 and to allocate capital to climate-focused and energy transition funds.
The interim targets are designed to support USS's net-zero ambition. Per publisher coverage, the fund had set a net-zero target for its investments of 2050 or sooner the previous May, but had subsequently faced criticism for not outlining the accompanying interim milestones. The new targets address that gap.
The centerpiece of the private equity commitment is a £500m Sustainable Growth mandate, which will be invested globally in climate-focused and energy transition strategies. Publisher reporting also describes a separate £2.5bn five-year decarbonisation bucket that USS has created.
The interim targets sit within the framework of the UN-convened Net-Zero Asset Owner Alliance, whose members were the first in the finance industry to set intermediate targets. For 2025 the alliance's ranges call for CO2 reductions of 22–32%, and for 2030 40–60%. Publisher coverage also notes that USS has made progress on its net-zero path through engagement and renewable energy investments.
The interim targets are designed to support USS's net-zero ambition. Per publisher coverage, the fund had set a net-zero target for its investments of 2050 or sooner the previous May, but had subsequently faced criticism for not outlining the accompanying interim milestones. The new targets address that gap.
The centerpiece of the private equity commitment is a £500m Sustainable Growth mandate, which will be invested globally in climate-focused and energy transition strategies. Publisher reporting also describes a separate £2.5bn five-year decarbonisation bucket that USS has created.
The interim targets sit within the framework of the UN-convened Net-Zero Asset Owner Alliance, whose members were the first in the finance industry to set intermediate targets. For 2025 the alliance's ranges call for CO2 reductions of 22–32%, and for 2030 40–60%. Publisher coverage also notes that USS has made progress on its net-zero path through engagement and renewable energy investments.
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