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Superannuation Arrangements of the University of London (SAUL)

The Superannuation Arrangements of the University of London (SAUL) is a pension scheme for employees in Higher Education. SAUL Trustee Company is the Trustee and the administrator of SAUL. We’re a team of pensions professionals who look after the pensions of more than 68,000 members. Investment assets were c.£3bn at 31 March 2023.

Initial target disclosure: May 2023

Portfolio level

Portfolio level – Portfolio decarbonisation reference target

Baseline date: 31 March 2021

We have decided not to select the 31 December 2019 Baseline date as set out in the Net Zero Investment Framework.

We completed work on our approach to climate change risk management in 2021 / 2022, basing the analysis on the asset allocation at the time.

Baseline performance:

  • Total Portfolio Emissions:712,054 tC02e.
  • Portfolio Carbon Footprint:216 tC02e / £m invested.

Target year: 2030, 2050


  • 2030 Target: Reduce the Carbon Footprint of the investment portfolio by 50% by 2030 (or sooner).
  • 2050 Target: Achieve Net Zero emissions within the investment portfolio by 2050 (or sooner).

GHG scopes included: The Trustee has agreed to include Scope 1, Scope 2 and Scope 3 GHG emissions in its portfolio emissions reduction reference target.

Although the measurement of Scope 3 emissions remains challenging, to not include them in our portfolio emissions reduction reference target would give us an incomplete picture of our exposure to climate change risk.

The Trustee currently includes Scope 3 emissions from all sectors, either using line-by-line data from MSCI or through estimates provided by the Strategic Investment Consultant using asset class “building blocks”.

Asset classes in scope: The portfolio emissions reduction reference target currently excludes the Scheme’s Liability Driven Investment Portfolio (as set out in the Net Zero Investment Framework).

SAUL is comfortable with excluding this portfolio from our emissions reductions targets at the current time, as the UK Government has set a legally binding target to achieve net zero greenhouse gas emissions by 2050.

Those remaining portfolio investments covered by the portfolio emissions reduction reference targets were c.73% at the Baseline date (31 March 2021). These include public and private investments in equity, real assets and credit.

Methodology/net zero scenarios: The Trustee has developed its climate strategy roadmap in line with the PAII Net Zero Investment Framework and IPCC’s 1.5°C pathways.

Emissions metrics: As SAUL remains an open Scheme and assets are expected to grow to meet our liabilities, an interim emissions intensity metric is more appropriate.

It also helps us to focus on deploying future capital into additional climate aware investments.

Portfolio level – Investment in climate solutions target

Quantitative target

Baseline date: 31 March 2021

Baseline performance: c.3.6%

Target years: 2025 (or sooner)

Target: We have set a 15% strategic allocation to Climate Solutions within the investment portfolio.

Methodology: At the current time, the allocation to Climate Solutions (which are defined with reference to the EU Taxonomy mitigation criteria) only includes dedicated mandates e.g. those that invest in renewable energy.

Where an external manager allocates to Climate Solutions as part of their existing mandate, we will consider reporting these separately to the quoted target over the coming years.

Asset level

Asset level – Portfolio coverage target

Baseline date: 31 March 2023

Baseline performance: The Trustee has agreed to adopt the Science Based Targets Initiative (SBTi) as an alignment metric, which examines whether a voluntarily disclosed company decarbonization target is aligned with a relevant science-based pathway.

Analysis of the investment portfolio (excluding the Liability Driven Investment Portfolio) at 31 March 2023 found that c.7% of portfolio companies have targets which have been approved by the SBTi.

Target year: None at the current time.

Target: The Trustee has not set a target for increasing alignment using the SBTi but will consider this again over the next few years.

Asset classes in scope: The portfolio coverage target currently excludes the Scheme’s Liability Driven Investment Portfolio.

Data sources: Science Based Targets Initiative (SBTi)

Asset level – Engagement threshold target

Approach: SAUL has appointed PIRC to implement our voting policy across our public equity portfolio.

In 2021 we expanded PIRC’s mandate to help us engage with portfolio companies, with climate change a key engagement priority.

Additional information

Methodology: We believe that the targets we have set are reasonable for SAUL to manage climate change risk within our investment portfolio.

These will, however, be reviewed annually to ensure that they remain appropriate.

Importantly, these targets are broadly compatible with the Intergovernmental Panel on Climate Change (IPCC) 1.5°C scenario and in line with the Net Zero Investment Framework.

Operational emissions: With c.50 staff, all based in London, SAUL has not yet set a target for its operational emissions. At the current time, we consider them negligible in light of the impact of our assets under management but will review this periodically going forward.

Fossil fuel investment: As part of SAUL’s approach to climate change risk management, we will implement restrictions (as far as practicable) from investing in the following companies:

  • involved in the exploration and extraction of oil sands;
  • involved in the exploration and extraction of thermal coal; and
  • generation of electricity using thermal coal.

The above is based on a 5% revenue limit.

Other information:

Other Climate Change Risk Management Objectives:

Alongside setting our Net Zero target, the SAUL also agreed the following additional objectives to help achieve it:

  • Proactively participate in collaborative engagements with portfolio companies in sectors that are highly exposed to climate change risk.
  • Monitor the quality of our manager engagement and divest from managers that cannot evidence effective outcomes-focussed engagement (subject to cost and fiduciary duty).

Emissions Data:

Where possible and where there is reasonable data coverage, the Trustee monitors ‘line-by-line’ emissions reporting for funds. These tend to be more generic, long-only asset classes such as public equity and public corporate credit. However, for funds with less than 50% coverage and illiquid assets, the Trustee monitors ‘asset class level’ carbon estimates in the absence of reliable, reported line-by-line emissions data from MSCI.

The Trustee notes using asset class modelling of emissions for assets where this data is not available enables a more holistic view of the Group’s total portfolio emissions, albeit recognising that the modelled data is not perfect.

The asset class modelling of emissions is provided by our Strategic Investment Consultant and is based on asset class ‘building blocks’. These are either calculated directly using a given index’s underlying holdings emissions (such as using MSCI ACWI as a proxy for a broad public equity fund) or in some cases these indices are used and extrapolated to other asset classes based on given assumptions (such as using the emissions of infrastructure firms within an index to proxy an infrastructure fund).

Emissions metrics will be calculated in line with the GHG Protocol Methodology, the global standard for companies and organisations to measure and manage their GHG emissions.