Speaker 0:
to discuss sustainability and leadership within the pensions industry. I'm joined now by Kate Jones. She is chair of the pension protection Fund. Well, Kate, I mentioned, uh, leadership there. I mean, how much of a leadership role does the pension Protection Fund feel that it has within pensions, particularly around issues such as sustainability?

Speaker 1:
Thank you. I think it it's not about a leadership position per se, I think. But we do recognise we're in quite a unique position as a public body. We don't have, uh, competitors, but it's from that unique position that we want to be able to share our experiences with the wider pensions industry, but also kind of directly drive drive change from our own actions a bit more behind the scenes.

Speaker 0:
But just digging into that, I mean, is that again coming back to the Is that a self a pointed role? Or do you get a sense of pressure, perhaps from politicians and think tanks? There's quite a lot of people swirling around at the moment with views on where pensions should be going, and one or two of them have specifically mentioned the pension protection fund. As part of that,

Speaker 1:
I think we've been around now for nearly two decades and I think you know, investing responsibly has always been at the heart of of how we can manage our portfolio and I think delivering sustainable returns for all of our stakeholders is really important to us. But I think it's not

Speaker 1:
just about our investment portfolio. You just look around the news and I think thinking about how we integrate ESG risks and opportunities into everything we do as an organisation is is really important, whether that's how we select suppliers or how we recruit or just how we run our business.

Speaker 0:
So what are some of those things that you consider you're leading on And when you make those statements saying this is what we're going to do, how do you get that trade off right between ambition and and the realism of what you can achieve?

Speaker 1:
I think it's a really interesting question. I think if for us we've always strived to kind of set out um, ambition because I do think that drives people, you need something that's kind of really challenging to to be to be aiming for, but also at the PPF integrity is really important to what we're doing. We don't want to be making kind of commitments that that we don't feel that we're going to be able to meet. So I think it's about balancing, um, that, uh, kind of ambition, um, and and the realism.

Speaker 1:
And I think you know, the the PPF is a is an organisation that loves its data. So before we can go and set any targets, the team really want to dig into the data, really understand and actually getting to the baseline, Whether that's around your data around diversity or where we are in our carbon footprint, as as an organisation or or for our investments is really important to us. It's about really understanding where we are. And from there, we can then work to kind of set some really kind of specific targets

Speaker 1:
and goals as we want to to move forward.

Speaker 0:
Can you give us a specific example and perhaps perhaps one of your sort of shorter term goals? I know everybody says, you know they want to be net zero by 2050 or 2040 but, you know, to get there you've got you've got to break that down into to more achievable time periods.

Speaker 1:
That's right. So we one in our sustainability strategy. And actually, in our three year strategic plan, we've got our overarching goal of making a difference which, to your point kind of is kind of quite quite broad brush. But within that, we have very specific kind of

Speaker 1:
one year KPIS key performance indicators that can really drive everybody towards towards some really tangible things. And so, for example, around diversity and inclusion. We've set ourselves some specific goals about having 30% 30% ethnic minority representation by the end of this year and about having 45% of, uh, senior women or women in senior roles. So they're kind of really specific things and on and on carbon, for example.

Speaker 1:
What we've decided is we've done our baselining work, and we've now identified a watch list of, um, 80 companies that we want to be specifically working and targeting who make up. You know, the the biggest contributors, um, in our equity and our, uh, credit card

Speaker 1:
bond portfolios to our to our carbon footprint. And we're working with each of those companies to develop a specific carbon reduction plan. So it's really about identifying specific things that we can work with companies and within our organisation to drive forward.

Speaker 0:
And what happens if you don't hit some of these goals? How transparent will you be then?

Speaker 1:
I think so. Transparency is really important to us. So not only have we published our, uh, our gender pay gap, we've also published our ethnicity, pay gap and our disability pay gap. And I think that's not very common for organisations to be doing that. So it's something that we're really proud of. I think it's really important and these targets are hard, particularly around diversity and inclusion.

Speaker 1:
Um and but the message to to the team is we're setting those targets to be to be ambitious, and it's not about portioning blame. We just want to, you know, kind of always strive to kind of understand what's working and what's and what's not working within, um, within any of the activities that we're doing.

Speaker 0:
You've talked a lot about diversity and inclusion, but I suppose for many people, a key part of sustainability is things such as climate change. So what are you doing specifically there?

Speaker 1:
So, um, coming back to the data point. We spent a lot of time, you know, really understanding where we are as an organisation. But we've been thinking about Scope 12 and three levels of emissions. So Scope one and two are the things that are within our direct control. For example, the the electricity generating the the power in this building. But Scope three is about emissions generated as part of the supply chain,

Speaker 1:
and we've identified that we're already net zero in our own operations under Scope one and two. But we think it's really important for our for an integrity. Proper Net zero commitment to address scope three as well. So we've set ourselves an ambition to be a net zero in our own operations, including Scope three by 2035.

Speaker 0:
Well, to finish with what's one big issue in sustainability that people aren't focused on now. But you and the Pension Protection Fund do think it's going to be big, and it's beginning to shape your agenda.

Speaker 1:
I think there's lots of priorities, and I think one of the challenges is figuring out which topics you get involved in and and which you don't. Um, but we work very closely with a number of other large investors, for example, as climate action 100. So we can already be working together

Speaker 1:
that have a much greater voice in influencing particularly organisations that have the the biggest carbon impact. But the one of the big themes that that we're talking about with with those organisations is about water. I mean, you turn on the news at the moment, we're hearing about

Speaker 1:
wildfires, extreme heat, and start to think about the implications of drought. So I think it's something that we, um as a world and globally, we really need to start focusing on both adaptation and the impact of these extreme temperatures on on on how we live and how we work. We

Speaker 0:
have to leave it there. Kate Jones. Thank you for joining us. Thank

Speaker 1:
you.