Railways Pension Schemes 
Combined TCFD Report 2023

Member 
summary
Climate
change
Climate
governance
Climate risks
in the scheme
Metrics and 
targets
Glossary
Appendices
page 2
Taskforce on Climate-related Financial Disclosure
Contents
Chair’s message to members...................................................................................................................................................................................................................3
1. About this report............................................................................................................................................................................................................................................4
2. Summary for members............................................................................................................................................................................................................................6
3. Climate change and its relevance to pension schemes....................................................................................................................................10
4. Climate governance at our schemes....................................................................................................................................................................................12
5. Climate risks in the schemes, impacts on strategy, and the actions we are taking...........................................................27
6. Metrics, targets and the transition to net zero..........................................................................................................................................................60
Glossary.......................................................................................................................................................................................................................................................................73
Appendix A: Index of statutory reporting requirements.........................................................................................................................................75
Appendix B: Further information in relation to selected climate metrics.............................................................................................79
Appendix C: MSCI disclaimer..............................................................................................................................................................................................................81
Appendix D: Principles for effective disclosures...............................................................................................................................................................82
Appendix E: GHG metrics by section...........................................................................................................................................................................................83

page 3
Taskforce on Climate-related Financial Disclosure
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Climate risks
in the schemes
Metrics and 
targets
Glossary
Appendices
Chair’s message to members
Dear Member,  
This is the third round of detailed reporting on how the 
railways pension schemes are managing the financial 
risks and opportunities relating to climate change.
We know that climate change remains an important 
issue to you. Therefore, with this report, we aim to 
provide an accessible update on how we are tackling 
the challenges presented by climate change, as well 
as meeting our regulatory requirements aligned to the 
recommendations of the Taskforce on Climate-related 
Financial Disclosures (TCFD).
The Railways Pension Trustee Company Limited 
(RPTCL), the corporate Trustee of the railways pension 
schemes, remains focused on our mission to pay 
pensions securely, affordably, and sustainably. We are 
supported in managing climate risks and opportunities 
by our wholly-owned subsidiary, Railway Pension 
Investments Limited (Railpen). Railpen’s purpose is 
‘to secure our members’ future’, and through its 
governance and operating arrangements, we ensure 
alignment with the Trustee’s mission, giving us both a 
clear line of sight of our shared objectives.
Both the physical impacts of climate change as well 
as the actions taken to mitigate those impacts, are 
financially material for pension schemes. This is why 
we must try to understand the risks and opportunities 
climate presents to our schemes, and adapt the way 
we manage the schemes accordingly. Importantly, 
the analysis in this report demonstrates that the best 
climate outcome for the schemes would be where 
the world meets the goals of the Paris Agreement in 
an orderly and just fashion. This has benefits for our 
members – both financially and societally – and is why 
we continue to dedicate time and effort to this topic.
We are very aware that this report is produced 
when the cost-of-living crisis remains acute in the 
UK, and amidst much global uncertainty and wider 
humanitarian crises. We recognise that this makes our 
role in providing a good pension even more important, 
and we know that tackling climate change in a just and 
equitable manner is crucial in this context.
The complexity of the railways pension schemes 
combined with the level of detail required in TCFD 
reports means that this report is, by necessity, very long 
and that some of the language we are required to use 
may be difficult to understand. With this in mind, we 
have provided a Summary for Members (Section 2) and 
a Glossary (towards the back of the document) to help 
explain the terms used.
I hope you find the report informative. 
Christine Kernoghan
Chair of RPTCL

The purpose of this report is to explain the governance 
and actions taken by the Trustee in identifying, 
assessing and managing climate-related risks and 
opportunities. The report fulfils the requirements of 
the Occupational Pension Schemes (Climate Change 
Governance and Reporting) Regulations 2021, 
Occupational Pension Schemes (Climate Change 
Governance and Reporting) (Miscellaneous Provisions 
and Amendments) Regulations 2021, and the new 
requirements detailed in the Occupational Pension 
Schemes (Climate Change Governance and Reporting) 
(Amendment, Modification and Transitional Provision) 
Regulations 2022 (taken together as ‘the Regulations’), 
which are themselves designed to align with the 
recommendations of the Taskforce on Climate-related 
Financial Disclosures1 (TCFD). 
The schemes in scope for this report are the Railways 
Pension Scheme (RPS) and the British Transport Police 
Force Superannuation Fund (BTPFSF); the report 
content refers to both schemes unless otherwise 
stated. The RPS is made up of six parts (including 
defined benefit (DB) and defined contribution (DC)
arrangements) with over 100 individual underlying 
sections2. The BTPFSF is a registered pension 
scheme providing DB and DC benefits (in respect 
of its Additional Voluntary Contribution (AVC) 
arrangements). Both schemes are administered by 
the same Trustee, invest in the same pooled funds, 
and are managed to the same climate governance 
arrangements. Therefore, this year’s TCFD report 
combines the content for both schemes into a single 
document, making it clear throughout if metrics or 
narrative reporting refer to one particular scheme in 
isolation. 
The railways pension schemes are amongst the 
most complex in the UK, with the individual sections 
servicing many different benefit arrangements. To 
simplify the governance and reporting of 
climate-related risks the Trustee has availed itself of 
flexibility within the statutory guidance3 to group 
similar sections, with the current groupings shown in 
figure 1.1 to the right. 
Figure 1.1: Level at which sections and arrangements 
are grouped for reporting purposes
The TCFD Recommendations – and therefore the 
Regulations and associated statutory guidance – are 
structured around four pillars:
n Governance
n Strategy
n Risk Management
n Metrics & Targets
In structuring our report, we have found it beneficial 
– in terms of the ease with which members could 
engage with the report – not to structure the report in 
a way that progresses sequentially from 1 to 4. Instead, 
we have prepared our disclosure in such a way as to 
maintain readability, though we provide an index at 
the back of the document for those wishing to look up 
particular statutory or TCFD reporting requirements.
All the data in this report is as of 31st December 2023, 
unless otherwise noted.
The day-to-day operation of the railways pension 
schemes is delegated to Railway Pension Investments 
Limited (Railpen), a subsidiary that is wholly-owned by 
the Trustee. Railpen undertakes a significant amount of 
climate-related activity on the Trustee’s behalf. This is 
reflected in the content of this report, which includes 
references to activities carried out both by the Trustee 
and by Railpen.
Further information in relation to Railpen’s approach to 
climate change can be found on Railpen’s website at  
railpen.com and in Railpen’s Net Zero Plan4.
page 4
Taskforce on Climate-related Financial Disclosure
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
1. About this report
1	
https://www.fsb-tcfd.org/ and IFRS – ISSB and TCFD
2	
Please see the Annual Report and Accounts for more detailed information.
3	
Governance and reporting of climate change risk: guidance for trustees of occupational schemes, Department for Work and 
Pensions, originally published June 2021, amended and re-published October 2022.
4	
Net Zero Plan
Reporting content
Level (s) at which information                
is reported
Climate metrics
Section level
Pooled Fund level
Scheme level/ Arrangement level
Total schemes level
Scenario analysis 
(asset side)
Pooled Fund level
Scenario analysis 
(liability side)
Scheme level
Grouped-section level
Covenant
Sector level
Employer level (in some cases)
Climate risks
in the schemes

page 5
Taskforce on Climate-related Financial Disclosure
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
1.1 Internal Audit
Whilst not a mandatory requirement to seek assurance 
over the TCFD report, Railpen’s Internal Audit team 
were engaged on the Trustee’s behalf to undertake 
work on the report prior to publication. This team is 
independent, objective and has an extensive track 
record in providing challenge and insights across the 
wider Railpen business, in conformance with the 
Chartered Institute of Internal Auditors ‘Guidance on 
Effective Internal Audit’ (The Code). An internal review 
of this report was chosen owing to the Internal Audit 
team’s extensive experience and the value that this 
would add to the process. 
 
The objective of this review was to provide assurance 
over the Trustee’s TCFD report and an independent and 
objective view of the process, content and statements 
made within the report. This was approached through 
a review of a sample of assertions made within the 
report, to evaluate the statements made, and the 
evidence the organisation holds to support making 
these specific disclosures. Internal Audit provided 
challenge and found that the sample of assertions 
tested were supported by clear evidence. A number of 
recommendations were raised around specific figures 
or language used in the report, and the resulting 
amendments that were suggested were adopted 
within the final version of this report.
Climate risks
in the schemes

page 6
Taskforce on Climate-related Financial Disclosure
2. Summary for members
Climate-related risks are financial risks. Over the long 
term, companies, consumers, and the financial industry 
are likely to have to adapt to new and bold climate 
policies like carbon taxes, or adapt to the potentially 
catastrophic consequences of uncontrolled climate 
change like sea level rises and increasingly frequent 
extreme weather, or a mixture of both. 
Whilst climate risk is likely to play out over many 
decades to come, its effects are already evident both 
in the dramatic and tragic weather events you might 
see on the news and, from time-to-time, in financial 
markets. There is some evidence that investors have 
decided they have enough certainty about the future 
evolution of, for example, energy policy and they have 
begun to factor climate change issues into the way 
they buy and sell financial assets. Attending to climate 
risk is part and parcel of an investor’s ‘fiduciary duty’ 
– the promise to act in the best interests of the person 
whose money is being invested. 
Climate risks have the potential to affect almost every 
sector, region, and asset class, depending on how the 
risks play out. This makes climate risk a systemic risk, 
because its effects are likely to be felt by a large part 
of the financial system, rather than being localised to 
one or two areas. This means long-term investors like 
pension funds are unlikely to be able to completely 
avoid climate risks by simply refusing to invest in 
certain sectors or countries.
The Trustee of the railways pension schemes treats 
climate risk with the seriousness it deserves. As we 
explain in this, our third TCFD5 report, the effects of 
climate change could impact three key areas of a 
pension scheme like ours:
n	Threats to the employer covenant: the pension 
fund depends on ongoing contributions from 
your employer. If your employer turns out to be 
vulnerable to climate risks, this could threaten the 
employer’s ability to contribute in the future.
n	Threats to scheme liabilities: the liabilities of 
the scheme – the amount of cash we need to 
pay out in pension benefits over a long period of 
time – might be affected by climate change if, for 
example, changes in climate affect life expectancy 
in the UK. This is very hard to predict, but is 
something pension funds need to monitor.
n	Threats to investment returns: a large part of 
our members’ pension is provided by investment 
returns which are generated when Railpen, the 
schemes’ investment manager, invests money on 
your behalf. Railpen is well regarded for taking a 
leading approach to climate change issues, but the 
possibility remains that climate-related risks could 
affect the amount of investment return generated 
by investing the schemes’ assets. Trustees, and 
their investment managers, need to take account 
of this.
The railways pension schemes are among the 
largest and most complex schemes in the UK. Good 
governance is essential when managing complexity. 
Since last year’s report, the Trustee Board’s Skills 
Matrix was updated to include reference to climate 
change in line with The Pension Regulator’s (TPR) 
recommendations on good practice. You can read 
more about climate governance in section 4 of 
this report.  
We have a framework for managing climate risks that 
spans the climate-related threats to covenant, liabilities, 
and investment returns. A summary is included in 
figure 2.1 on the next page.
5	
TCFD stands for Taskforce on Climate-related Financial 
Disclosures, a body that has recommended a reporting 
structure for organisations wanting to make a disclosure 
about climate change. From 2022, large UK pension funds 
have been required to produce a report that complies with 
the recommendations of the TCFD.
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Climate risks
in the schemes

Covenant
On our behalf, Railpen has assessed and keeps under review, the way in which climate risks affect and are affected by (i) UK policy, (ii) sectoral 
issues in the rail industry, and (iii) particular issues at individual employers. This provides the Trustee with a valuable assessment of climate risks 
to the schemes’ employers. 
You can read more about this in section 5.2.    
Liabilities
To improve our understanding of the sensitivity of the schemes’ liabilities to climate risks, we undertook ‘climate scenario analysis’ in 2022. This 
means we made assumptions about the ways in which climate change might play out over the long term, then considered the potential impact 
on the schemes’ liabilities. In particular, we reviewed the impact that climate change might have on life expectancy. 
While the results of the analysis suggested the impact of climate change on liabilities is likely to be relatively low, the relationship between 
climate change and life expectancy is inherently unpredictable, so we will be monitoring this again in the future.
We compared the impact climate change might have on liabilities to the impact it might have on investment returns. The results suggest that 
climate change might have a bigger impact on investment returns than on liabilities.  
You can read more about this in section 5.3.    
Investments
Working on the Trustee’s behalf, Railpen incorporates climate risks and opportunities into the investment management process. Briefly put, 
Railpen aims to reduce climate-related risks, and identify climate-related opportunities, because it is likely that doing so would support the 
Trustee’s mission to pay pensions securely, affordably, and sustainably. This includes:
n Excluding companies we think might face elevated risks of asset stranding, including those with significant revenues from thermal coal and 
       tar sands
n Incorporating assessments of climate risk and net zero alignment into investment decisions using a tool developed in-house
n Engaging companies and voting at company AGMs in a way that holds companies to account for the management of climate risks and the
       transition to net zero
n Overseeing external fund managers to make sure they meet our own high standards on climate change issues
You can read more about this in section 5.4.   
page 7
Taskforce on Climate-related Financial Disclosure
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Figure 2.1: A framework for managing climate risks
Climate risks
in the schemes

page 8
The Trustee has adopted climate targets that, if 
achieved, should put the schemes on track to be ‘net 
zero’ by 2050 or sooner. ‘Net zero’ is a state in which 
the emissions financed by the schemes’ investments 
are very close to zero, and any residual emissions are 
removed from the atmosphere either by natural or 
technological means. The schemes aim to halve their 
carbon footprint by 2030, and to have reduced it by 
25-30% by 2025.
In respect of these targets, the schemes are making 
good progress, and look on track to meet the 2025 
targets at current pace. There is also a lot of work 
being done to engage with the individual investments 
within the schemes to encourage those companies and 
assets to adjust their operations to be aligned to a net-
zero pathway. The current level of ‘alignment’ to this 
net-zero pathway is very low, which reflects the state 
of the global markets at present, however, the schemes 
are starting to see progress being made.
It is important to note that the metrics used in this 
report to monitor progress can be volatile and vary 
significantly year-on-year, and they can also be 
difficult to calculate precisely. Therefore, the Trustee 
focus is on the long-term trajectory for the schemes, 
and the quality of the activities and outcomes 
being undertaken to address climate risks. For more 
information on our performance against the 2020 
baseline and our climate targets, please see section 6.2 
of this report.
Taskforce on Climate-related Financial Disclosure
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Climate risks
in the schemes
2020
0
25
50
75
100
2023
2025
2030
2050 or sooner
Financed emissions, tonnes GHGs per £m invested
Financed emissions
of a global index
Net zero
Baseline
14-38% lower
25-30% lower
50% lower
Figure 2.2: Carbon footprint targets and performance to date

page 9
Taskforce on Climate-related Financial Disclosure
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Climate risks
in the schemes
A significant amount of the schemes’ assets are 
invested in renewable energy and other sectors that 
could benefit from the UK’s transition to a greener 
economy. For example, we own two large wind farms 
in Scotland that produce enough energy to power 
around 45,000 homes. In January 2023, we completed 
our acquisition of a solar farm in Cambridgeshire which 
will produce clean energy sufficient to power a further 
8,000 homes. Green investments can be attractive 
to long-term investors like pension funds, provided 
the price of the investment makes financial sense. 
The transition to net zero could provide significant 
investment opportunities, and the schemes’ investment 
manager continues to locate sustainable investments 
that match the needs of our members. 
In producing this TCFD report, we have provided as 
much climate-related information as we have been 
able to source, but unfortunately investors are still 
some way from having perfect information. For 
example, reporting annual Greenhouse Gas (GHG) 
emissions data is not compulsory in most markets, 
meaning that plenty of companies do not report to 
investors the amount of GHG emissions each year. 
It is not always possible to estimate a company’s GHG 
emissions to plug gaps in the data. Issues like these 
mean that the carbon footprint data we provided 
on the previous page covers about three quarters 
of the investment portfolio of the railways pension 
schemes, rather than the whole lot. The Trustee and 
Railpen are members of several industry initiatives that 
support improvements in climate-related information 
(see section 6.4.3). More information should improve 
our ability to take action on climate risk, and keep 
our stakeholders – including our members – better 
informed via this annual TCFD report.
We recognise that many readers may be encountering 
this topic for the first time, and we have tried to 
make this report as readable as possible to members. 
Writing a report on climate change, and its complex 
connections with pensions, cannot be done without 
having to resort to concepts that are somewhat 
technical in nature and unfamiliar to many. We have 
tried to avoid jargon where we can, and we have 
provided a glossary of key terms to aid the report’s 
readability. 
Members who wish to contact us or learn more 
about the schemes’ approach to climate change are 
encouraged to email us at contactus@railpen.com

page 10
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
3. Climate change and its relevance to pension schemes
Investors ought also to be aware of litigation risks. 
Litigation risks are often categorised under transition 
risks, but can also be considered separately. These 
risks may result where businesses and investors fail to 
account for the physical or transition risks of climate 
change, and are prone to legal action from potential 
claimants. 
Further, investors ought also to be aware of climate 
opportunities. These opportunities can come through 
efforts to mitigate climate change and drive the 
transition to net zero, as well as through solutions that 
help organisations and society adapt to the changing 
climate and make us more resilient to its impacts.
3.2 Why climate change matters to 
pension schemes
From an investment perspective, physical and transition 
risks can affect the assets, operations and financial 
performance (i.e. profits) of the assets in an investor’s 
portfolio. When climate-related risks crystallise at the 
company-level, it is likely they will also affect the value 
of the investor’s asset, for example, the financial value 
of a company’s shares in the marketplace. As a result, 
investors have a fiduciary duty to consider 
climate-related risks.
It is important to recognise that climate risk is 
‘systemic’ in nature. This means that its impacts are 
so wide-ranging that they are likely to affect, in some 
way, the majority of the entire financial system, as 
opposed to being localised to one or two sectors or 
regions of the economy. Since climate risk is systemic, a 
long-term investor cannot eliminate this risk simply by 
avoiding certain sectors or regions. 
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes
Figure 3.1.1: Definition of physical and transition risks
Physical risks
Transition risks
Physical risks are those that pertain to the physical 
impacts that occur as the global average temperature 
rises. For example, the rise in sea levels could have 
impacts such as flooding and storm surge. 
Physical risks are event-driven (acute) or relate to 
longer-term shifts (chronic) in climate patterns.
Physical risks have direct and indirect financial 
implications for investments, including damage 
to assets, impacts from supply chain disruption, 
water availability and quality, food security, extreme 
warming affecting premises, operations, supply 
chain, transport needs, and employee safety.
Transition risks arise as we seek to realign our 
economic system towards a net zero and resilient 
future.
Transitioning to a net-zero economy may entail 
extensive policy, legal, technology, and market 
changes to address mitigation and adaptation 
requirements related to climate change.
Depending on the nature, speed, and focus of 
these changes, transition risks pose varying levels of 
financial and reputational risk to organisations.
3.1 Physical, transition, and litigation risks
In line with the TCFD framework, climate-related risks can be divided into two major categories: 
	
1. Physical risks – those related to the physical impacts of climate change.
	
2. Transition risks – those related to the transition to a lower-carbon economy.

page 11
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes
Figure 3.2.1: Climate risk and the global financial system
Physical risk
Locations, assets and firms
Acute risks
n Cyclones
n Sea level rise
n Flood events
Chronic risks
n Water stress and drought
n Wildfires
Derivative impacts
n Social and political conflicts
n Mass migration
High emissions sectors and countries
Equities
 Debt
Banks
Lending and insuring high emissions 
sectors driving equity and credit risk in the 
global financial system
Systemic risk
Insurers
Global corporates and sovereigns
Global financial system
Transition risk
Figure 3.2.1 (above) depicts physical and transition climate risks, and their 
transmission into systemic risks.
In addition to investment returns, sustainable pension schemes must attend to 
climate risks to liabilities and the covenant strength of participating employers. 
n Covenant: Employers that contribute to (or sponsor) a pension fund may 
themselves be vulnerable to climate-related risks. As a result, their ability to 
contribute to the pension scheme over the long term could, if risk management 
activity proves insufficient, be compromised by physical and climate risks.
n Liabilities: The liabilities of a defined benefit pension scheme could be affected 
by changes to mortality assumptions, other macroeconomic variables such as 
inflation (i.e. if climate change or climate policies affect the general level of 
prices for goods and services), or influences on the discount rate.
Our governance and activities in relation to climate risk, therefore, span the areas of 
covenant, liabilities, and investments, and this report is structured so as to provide 
disclosure on each area.

‘Climate governance’ means the arrangements in 
place within the pension schemes to manage climate-
related risks and opportunities. This section describes 
the schemes’ climate governance, in line with the 
Regulations.
4.1 The railways pension schemes 
Railways Pension Trustee Company Limited (RPTCL) 
is the corporate Trustee6 of the railways pension 
schemes and for each separate section within the 
Railways Pension Scheme. The Trustee is responsible for 
managing four railways pension schemes:
n BR (1974) Fund
n British Transport Police Force Superannuation Fund 
n British Railways Superannuation Fund  
n Railways Pension Scheme 
The schemes are occupational pension schemes 
providing defined benefit (DB) and defined contribution 
(DC) benefits. 
The Trustee Board is comprised of 16 directors, 
8 nominated by employers and 8 by members of the 
railways pension schemes (6 are nominated on behalf 
of employees and 2 on behalf of pensioners). Directors 
are appointed for a six-year term of office, with a third 
of them retiring by rotation every two years. 
Railpen (the trading name of Railway Pension 
Investments Limited), is a wholly-owned subsidiary 
of the Trustee. Railpen is authorised and regulated 
by the Financial Conduct Authority (FCA). Railpen 
acts as the investment manager and fiduciary adviser 
for the railways pension schemes and is responsible 
for the day-to-day operation of the schemes and the 
management of around c.£34bn of assets.
Figure 4.1.1: Overview of the Railways Pension 
Scheme
The Trustee is the only client of Railpen, ensuring 
that its activities are aligned with the interests of the 
schemes’ members.
Further information on the schemes and the 
composition of the Trustee Board is available in 
the 2023 Annual Report and Audited Financial 
Statements7.
4.1.1 The Railways Pension Scheme (RPS)
The RPS is the largest of the four schemes and was 
created in 1994, following the privatisation of the 
railway industry and reorganisation of the British Rail 
Pension Scheme. It is one of the largest schemes in 
the UK. It provides pensions for over 150 companies 
operating within the privatised railway industry.
page 12
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Climate risks
in the schemes
Metrics and 
targets
Glossary
Appendices
4. Climate governance at our schemes
Railways Pension Scheme
104
104
261,659
1994
Pensioners 
Section
Shared Cost
Arrangement
Defined 
Contribution 
Arrangement
Defined 
Benefit
Arrangement
Omnibus
Section
IWDC Section
0
0
1
32
785
1
1
79,591
1
39
15,512
sections
employers
members
6  We use ‘RPTCL’ and ‘Trustee’ interchangeably in this report.    7  Available at http://www..railpen.com 
Taskforce on Climate-related Financial Disclosure

page 13
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Climate risks
in the schemes
Metrics and 
targets
Glossary
Appendices
Taskforce on Climate-related Financial Disclosure
4.1.2 The British Transport Police Force 
Superannuation Fund (BTPFSF) 
The BTPFSF is made up of the 1968 Section (which 
is a small historical Section); the 1970 Preserved 
Section (comprising pensioners only); and the 1970 
Contributory Section which is open to new entrants 
and has three benefit structures depending on when 
a member joined the Fund. The scheme invests in the 
pooled fund structure of the railways pension schemes 
and is currently open to new members.
The principal employer of the Fund is the British 
Transport Police Authority (BTPA), an independent 
body responsible for overseeing the work of the British 
Transport Police (BTP) – the national dedicated police 
force for the railways. Membership of the BTPFSF was 
7,889 as of 31 December 2023.
British Transport Police Force 
Superannuation Fund
7,889 members
1968 Section
The 1970 
Preserved Section
The 1970 
Contributory Section

page 14
4.2 Climate governance overview 
The Trustee places great emphasis on maintaining high 
standards of fiduciary governance. Governance8 means 
having the people, structure and processes in place 
to provide the foundation for the efficient operation 
and effective decision-making of the Trustee Board. 
The experience and skills of Trustee directors are the 
cornerstones of the Board’s effective ways of working. 
When it comes to climate-related risks, the Trustee 
has a duty to ensure good governance of climate risks 
and to monitor the potential impacts on investment 
returns, liabilities, and employer covenant.
Governance is multi-faceted: climate governance – 
including the Trustee, others undertaking scheme 
governance activities, and advisers – may be considered 
in six parts, as shown in figure 4.2.1 (right). Taken in 
aggregate, the six subsections shown explain how the 
Trustee maintains oversight of the climate-related risks 
and opportunities relevant to the schemes. 
Figure 4.2.1: Six parts of climate governance
The Trustee has chosen to take an approach to the 
oversight and management of climate-related risks 
and opportunities that integrates, as far as possible, 
into the processes for how they consider other 
risks and opportunities. However, given the unique 
challenge climate risks pose, some monitoring 
and reporting is carried out separately to other 
risk management processes. The Investment Risk 
Governance Framework (explained in section 4.4) is 
reviewed annually and approved by the Trustee. At 
the time of publication, the Trustee is satisfied that 
this framework is sufficient for the management of 
investment risk, including climate-related risk.
The schemes are amongst the most complex in the UK. 
The day-to-day operation of the schemes are delegated 
to Railpen, with oversight maintained by the Trustee 
through reporting quarterly, annually, and as required. 
Within Railpen, oversight of climate risk management 
is ensured by the application of the Investment Risk 
Governance Framework and, in an investment context, 
through oversight of Railpen’s Investment Management 
team by its Fiduciary team. Physical and transition 
climate risks are identified, assessed and managed 
using several tools and approaches as described later 
in this report, particularly section 5.
RPTCL’s Statement of Investment Offering (see section 
4.4) prescribes a list of pooled funds that individual 
sections subscribe to according to their investment and 
funding requirements. Given the one-to-many mapping 
of pooled funds to the sections that invest in them, it is 
efficient from a governance and reporting standpoint 
to consider the impacts of climate risk at a pooled fund 
level. This means that, in this TCFD report, we produce 
analytics and pass comment at a pooled fund level (for 
example when reviewing climate scenario analysis or 
climate metrics).
Railpen is responsible for ensuring that external fund 
managers invest scheme assets in line with RPTCL’s 
investment policy. Railpen also requires that the fund 
managers’ climate, ESG, stewardship and sustainable 
investment policies align with RPTCL’s own policies. 
This includes assessing how the relevant manager 
makes investment decisions based on the medium- 
to long-term financial performance and climate and 
ESG risks of investee companies and engages with 
investee companies to improve their performance. 
The climate and ESG practices of external managers 
are typically reviewed prior to appointment and on 
a regular basis thereafter. 
In the interests of providing the reader with a 
simplified exposition of climate governance at the 
railways pension schemes, we refer only to those 
bodies, committees and documents, that have a 
relation to the governance of climate risk, i.e. the 
arrangements we refer to do not represent an 
exhaustive mapping of governance at the railways 
pension schemes and Railpen.
8	
In this report we adopt the definition of ‘Governance’ 
used in the relevant Statutory Guidance: “the way a 
scheme operates and the internal processes and controls 
in place to ensure appropriate oversight of the Scheme…
This includes – but is not limited to – decisions relating 
to investment strategy or how it should be implemented, 
funding, the ability of the sponsoring employer to support 
the Scheme and liabilities.”
Investment Beliefs
Documentation 
and processes
Roles and
responsibilities
Training 
and Trustee 
Knowledge and 
Understanding
Monitoring
Reporting
Governance
Six aspects
1
2
3
4
5
6
Taskforce on Climate-related Financial Disclosure
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Climate risks
in the schemes
Metrics and 
targets
Glossary
Appendices

page 15
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Climate risks
in the schemes
Metrics and 
targets
Glossary
Appendices
4.3 Investment Beliefs 
The Investment Beliefs shared by the Trustee and 
Railpen serve as a foundational and reliable guide to 
investment decision-making. The investment activities 
that Railpen carries out on behalf of the Trustee 
must align to the these beliefs. These investment 
activities are overseen by the Asset Management 
Committee (AMC) who ensure adherence to the 
Trustee’s investment policy. The Trustee reviews and 
monitors performance (and fees) to ensure that the 
activities of Railpen continue to be aligned with the 
Trustee’s investment policy. As noted in the Statement 
of Investment Principles, the Trustee reviews the 
Investment Beliefs annually.
The Trustee made material updates to the Investment 
Beliefs in 2021. Previous Investment Beliefs referred 
to a link between ESG9 factors and investment 
performance, and a duty to incorporate ESG into 
investment decision-making. The updated Investment 
Beliefs refer explicitly to climate change, reflecting its 
significance for the successful delivery of the Trustee’s 
mission (see figure 4.3.1). Climate change could 
be said to relate to all six of the Investment Beliefs, 
though we highlight one particular belief for its explicit 
reference to climate change.
Figure 4.3.1: The shared Trustee and Railpen Investment Beliefs, updated in 2021
9	
Environmental, social, and corporate governance investment factors.
Beliefs
Belief narrative
1.    Managing asset-liability risk is integral to a 
scheme’s long-term success.
Environmental, social, and governance (ESG) 
factors affect corporate financial performance, 
asset values, and asset-liability risk. Well-informed 
and financially material ESG analysis, as part 
of a holistic investment process, supports the 
identification and ultimately the pricing of ESG 
risk and opportunity. Constructive engagement 
combined with thoughtful voting can protect and 
enhance investment value. 
A long investment horizon exposes a pension 
scheme to societal and systemic risks, such as 
climate change. These risks are growing and 
need to be managed. Capital allocation by 
investors and corporates makes a difference 
in how these risks play out. Railpen has a 
responsibility to make a scheme assets resilient 
to systemic threats and position portfolios for 
long-term opportunities. We believe it is possible 
and necessary to deliver the returns the schemes 
need, whilst positively contributing to the world 
our members retire into.
2.    Long-term focused investment decision 
making has many advantages that should be 
carefully exploited.
3.    Diversification of the overall investment 
portfolio, across different structural drivers of 
return, improves the resilience of a scheme’s 
assets in an uncertain world.
4.    Incorporating and acting upon climate 
risk and other environmental, social and 
governance factors is a significant driver 
of investment outcome and part of our 
fiduciary duty.
5.    Effective portfolio management requires 
flexibility around a thoughtfully considered 
investment strategy.
6.    Investments should be selected, structured 
and sized in a manner aligned to a scheme’s 
long-term objective.
Taskforce on Climate-related Financial Disclosure

page 16
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Climate risks
in the schemes
Metrics and 
targets
Glossary
Appendices
Figure 4.4.1: Three levels of risk authority
Boards & Committees
(Level 1)
n	
Delegates and oversees investment decision making authorities of Management Committees
n	
Reserves approval authority for e.g. investments beliefs, risk management frameworks, policies, principles, 
new pooled funds, new asset classes, new investment teams, special nature investment transactions, major 
service providers (custodian, etc.)
Management Committees
(Level 2)
n	
Delegates and oversees investment decision-making of Investment Team
n	
Reserves approval authority for e.g. risk directives, risk parameters, thresholds, limits, material investment 
transactions, mandate compliance.
Investment Leadership
(Level 3)
n	
Delegates and oversees investment decisions by individual members of investment teams
n	
Approves e.g. significant and non-significant investment transactions, tactical asset allocation, appoint/
terminate external managers, procedures, trading, pooled fund liquidity, rebalance portfolios, reinvest cash 
flows, fees.
4.4 Documentation and processes 
The Investment Risk Governance Framework (the 
‘Framework’) defines the structure and relevant 
processes for the governance surrounding the 
management of investment risks across the schemes, 
sections and pooled funds. A risk governance 
framework principally needs to drive clear ownership 
and accountability for all investment decisions. It 
should create a well-defined set of expectations 
regarding risk taking and assessing adherence with 
those expectations, thus facilitating purposeful 
business outcomes. 
This is achieved by having a structure with distinct 
levels of authority. Risk governance is divided into three 
levels, as shown in figure 4.4.1. The levels allow the 
risk governance framework to provide a strong link 
between delegation, oversight and decision-making. 
This in turn ensures the right decisions are made by 
those with the most specialism and experience, whilst 
sufficient oversight is guaranteed. 
Taskforce on Climate-related Financial Disclosure

page 17
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Climate risks
in the schemes
Metrics and 
targets
Glossary
Appendices
More information on the roles of Level 1, 2, and 3 risk 
authorities is provided in section 4.5. 
A thorough, consistent and aligned set of governing 
documents forms the cornerstone of successful 
governance. The Investment Risk Governance 
Framework establishes a document hierarchy that is 
driven by the three levels, and which defines oversight 
and accountability for the entirety of items within the 
Trustee’s scope, including climate risk. This confers 
responsibilities on the Trustee, others undertaking 
scheme governance activities, and advisers. 
The Investment Risk Governance Framework ensures a 
clear understanding of which governing documents are 
required and who owns them. The documents owned 
by the Boards and committees provide the well-defined 
parameters from which all subsequent investment risk 
decisions are derived. These documents include Mission 
and Beliefs, the Statement of Investment Principles 
(SIP), Railpen’s Investment Manager Agreement (IMA), 
and Terms of References and Policies. The Investment 
Risk Governance Framework also establishes a decision 
authority matrix with governing authorities and 
investment approval delegated authorities. Ultimately, 
the Investment Risk Governance Framework enables 
boards and committees to satisfy themselves that 
persons advising or assisting take adequate steps 
to identify and assess any climate-related risks and 
opportunities which are relevant to the matters on 
which they are advising or assisting.
Figure 4.4.1.2: Document hierarchy in the Investment Risk Governance Framework
Boards & committees
(Level 1)
Policies
Management Committees
(Level 2)
Directives
Directives are rules-based technical documents 
which operationalise the policies’ principles. 
They define detailed parameters, methodology 
and thresholds. Risk Directives must adhere to 
Risk Policies.
Investment Leadership
(Level 3)
Procedures
Procedures are process-based documents that help 
to institutionalise our investment decision making 
and execution and must adhere to the Directives.
Policies are principles-based instructions for the 
oversight of investment management. They establish 
frameworks and authorities and stipulate the need 
for specific Directives.
Taskforce on Climate-related Financial Disclosure

page 18
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Figure 4.4.1.3 lists the key level 1, 2, and 3 
documentation that relates to the management of 
climate risk. The tables that follow explain the specific 
relation between the document and climate risk for 
levels 1 and 2 documents.
Key frameworks and policies were reviewed and 
re-approved in 2023. Where the review amended an 
arrangement relating to climate risks, this is noted in 
the following tables (right).
Figure 4.4.1.3: Documentation relating to climate risk, levels 1, 2 and 3
Level 1 documents relating to climate change10
Risk authority
Document type
Documentation relevant for 
climate risk
Level 1
Boards and 
committees
Policies
Investment Risk Governance 
Framework
RPTCL – Railpen Investment 
Management Agreement (IMA)
Statement of Investment Principles 
(SIP)
Investment Beliefs
Statement of Investment Offering
Pooled Fund Policy & Pooled Fund 
Mandates
Investment Risk Policy
Board and committees Terms of 
Reference & Meeting Minutes
Investment & Risk Report
Level 2
Management 
Committees
Risk Directives
ESG Risk Directive
Investment Transaction Approval 
Directive
Investment Management 
Agreements
Level 3
Investment 
Leadership
Procedures
Team Procedures
Investment Recommendations
Investment Risk Governance Framework
Purpose
This document defines the structure and relevant processes for 
the governance surrounding the management of investment risks 
across the schemes, sections and pooled funds.
Relevance for Climate 
Governance
The Investment Risk Governance Framework documents:
n	
Inventory of major investment decisions
n	
Authority for delegation and oversight of decisions
n	
Authority for making of decisions
n	
Approval processes and governance documentation.
10	 Please note the Investment Beliefs, which are described on page 15 plus the Investment & 
Risk Report, which is explained on page 27.
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes
Statement of Investment Principles (SIP)
Purpose
The RPTCL SIP sets out the Trustee’s arrangements in respect of 
investing scheme assets. 
Relevance for climate 
governance
The SIP recognises that climate change can have a financially 
material impact on investment returns, and that the Trustee has 
a legal duty to consider financially material climate factors. In the 
SIP, the Trustee commits to undertake annual training on ESG and 
climate change.
The SIP was reviewed in December 2022 with the Trustee’s 
expectations in relation to ESG factors restructured for additional 
clarity. In addition, the term ‘climate change’ has been included 
throughout to make clear that the Trustee’s expectations in 
relation to ESG factors encapsulate climate factors where material.

page 19
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Investment Risk Policy
Purpose
This document stipulates the guiding principles and framework for 
the management of investment risks.
Relevance for climate 
governance
The Investment Risk Policy defines ESG risk (which includes climate 
change) and sets a requirement for a Level 2 document, namely 
an ESG Risk Directive.
Pooled Fund Policy and Pooled Fund Mandates
Purpose
This document sets out the investment objectives and investment 
risk guiding principles and limits for investment management 
activities within the pooled funds.
Relevance for climate 
governance
The document states that ESG risk, which includes climate risk, 
should be integrated into the investment process, minimised and 
diversified. It should be risk-managed as part of the ongoing 
active management of assets.  
Statement of Investment Offering
Purpose
This document defines the range of investment products to be 
used in client investment strategy and, importantly, sets out 
the Trustee’s expectation that its Investment Beliefs should be 
integrated into the investment process.
Relevance for climate 
governance
Our Investment Beliefs include explicit reference to climate 
change. 
Board and committees Terms of Reference and Meeting Minutes
Purpose
Terms of Reference (ToR) for the Trustee Board, the Integrated 
Funding Committee, and the Defined Contribution Committee, 
are approved by the Trustee Board; the ToR for the Asset 
Management Committee are approved by the Railpen Board; 
the ToR for the Investment and Risk Committee are approved by 
the Asset Management Committee. 
Relevance for climate 
governance
Duties laid out in ToRs cover roles and responsibilities for activities 
that have a bearing on funding and investment issues. 
Climate-related risks (where material) are considered to be within 
the scope of the duties laid forth in Board and committees terms 
of reference.
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes
RPTCL-Railpen IMA
Purpose
Establishes the terms of the discretionary investment management 
agreement given to Railpen by the RPTCL.
Relevance for climate 
governance
Requires Railpen to invest in line with the Trustee’s SIP, which 
refers to climate change. Delegates investment powers and 
voting rights to Railpen. Requires Railpen to provide the Trustee 
with information that enables the Trustee to review and monitor 
engagement activities, the exercise of voting rights and the 
‘financially material considerations’ and ‘non-financial matters’ 
(as set out in the Investment Regulations) taken into account in 
the selection, retention and realisation of investments.

page 20
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Level 2 documents relating to climate change
ESG Risk Directive
Purpose
This document specifies how ESG risk, as defined in the 
Investment Risk Policy, should be monitored, measured, and 
managed.
Relevance for climate 
governance
ESG risk is defined to include climate risk. The Directive sets 
certain pooled fund-specific requirements in respect of ESG risk 
management, and directs a policy of excluding carbon intensive 
businesses (thermal coal and tar sands) in order to reduce the risk 
of asset stranding.
Investment Transaction Approval Directive
Purpose
This document defines the framework for determining the 
classification of investment transactions (by size and nature) and 
the relevant approval authorities.
Relevance for climate 
governance
Investment approvals may be escalated for reasons relating to 
ESG risk including climate risk. The Directive requires investment 
managers to provide all relevant investment and due diligence 
information to Railpen’s Investment Risk and Sustainable 
Ownership teams. More information is provided in section 4.5.
Investment Management Agreements (IMAs) – external managers
Purpose
These documents establish the terms of appointment of external 
managers.
Relevance for climate 
governance
IMAs and similar documentation place requirements on external 
investment managers in relation to ESG and climate change. 
Requirements are in place for the management of climate risks, 
and the reporting of risk management activities on an agreed 
basis. Specific requirements are set out for those managers 
in-scope of Railpen’s Net Zero Plan.
In addition to the above, a number of third-party suppliers support the governance of 
climate-related risks. Supplier contracts document the requirement for climate-related 
data, proxy advice, climate scenarios, consultancy and so on. Certain significant 
suppliers are required by contract to produce Key Performance Indicators or other 
indicators of activity such that the Trustee, or Railpen acting on its behalf, can 
measure the delivery of services to RPTCL.
Key documents are stored, managed, reviewed, and processed for approval via a 
Sharepoint site. 
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes

page 21
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Level 3: The last level represents Investment 
Leadership, including the Investment Teams, who are 
ultimately responsible for the execution of bottom-up 
investment decisions. These are investment experts 
who are employed to deliver investment returns in 
line with Railpen’s purpose. These may be teams or 
individuals who make security and portfolio level 
investment decisions or, for example, recommend (for 
approval) investments to a Management Committee. 
These include Investment Leadership Committees 
(ILCs), which comprise the Public Markets Investment 
Committee (PMAC), Private Markets Investment 
Committee (PMIC), and the Real Assets Investment 
Committee (RAIC).
In the context of climate risk governance, key level 1, 
2, and 3, risk authorities are displayed in Figure 4.5.1. 
The remit of each authority as relating to climate risk 
is explained on the following pages.
11	 Level 1 relates to what the TCFD Recommendations refer to as ‘the Board’ and Levels 2 and 3 relate to what the TCFD 
Recommendations refer to as ‘Management’. 
Figure 4.5.1: Summary of climate governance within the railways pension schemes and Railpen11
Trustee Board
RPIL Board
AMC
IRC
ILCs
IFC
Fiduciary and Investment 
Team
Third-party 
Suppliers
DCC
Level 1: 
Boards & committees
Level 2: 
Management Committees
Level 3: 
Investment and 
Fiduciary Leadership
Other
Sustainable 
Ownership
Fiduciary Clients
4.5 Roles and responsibilities 
This subsection describes the roles of those 
undertaking and those advising and assisting the 
Trustee with scheme governance activities, in the 
identifying of, assessing and managing climate-related 
risks and opportunities relevant to those activities.
As described in section 4.4, the Investment Risk 
Governance Framework establishes three levels of risk 
authority for the Trustee and Railpen:
Level 1: Boards and their committees oversee the 
governing parameters, which set the necessary 
expectations and context for all investment decisions. 
Level 1 also provides the valuable role of oversight, 
ensuring delegated authorities are thoughtful and well 
maintained. 
Level 2: The second level of authority consists of 
various Management Committees. These operate 
within the Level 1 defined frameworks and policies. 
These Management Committees are granted authority 
to make various investment decisions, which are 
overseen by Level 1. In addition, these Management 
Committees are eligible to further delegate more 
detailed, but less material, investment decisions to 
individual investment teams / members. For example, 
the Investment and Risk Committee would approve risk 
thresholds (which fall below the Asset Management 
Committee (AMC) approval limit), and for example, 
would recommend the AMC any changes to Pooled 
Fund Mandates. 
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes

page 22
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Section 4.4 describes the Investment Transaction 
Approval Directive, which determines which risk 
authority may approve which transaction depending 
on its nature classification, where transaction nature 
classification depends on a range of factors including 
the perceived degree of climate risk. Figure 4.5.2 
summarises which risk authorities approve which 
transactions, and further information is available 
below.
Figure 4.5.2: Risk authorities for investment approvals
Railpen undertakes a range of activities to assist or 
advise the Trustee with its oversight responsibilities 
relating to climate-related risks and opportunities. 
This includes delivering training (see section 4.6), 
investment management services including climate risk 
integration (see section 5.4), advice relating to climate 
impacts on employer covenant and liabilities (sections 
5.2 and 5.3), external manager monitoring, delivery of 
programmes to support the Trustee’s climate targets, 
provision of climate scenario analysis, and support in 
the production of the schemes’ TCFD report.
Risk authority
Nature Classification
Level 1
Boards and committees
Special nature 
transactions
Level 2
Management 
Committees
Material transactions
Level 3
Investment Leadership
Significant transactions
Integrated Funding Committee (IFC)
Composition
Four employer-nominated and four member-nominated directors 
of the Trustee Board.
Relevance for climate 
governance
The IFC is responsible for principles for integrated risk 
management; discount rates and other funding assumptions; 
the investment advice framework; covenant ratings and client 
portfolio management principles. Material climate risks relating to 
these duties are considered within the scope of the IFC. The IFC 
oversees the appointment and monitoring of the scheme actuary. 
Trustee Board
Composition
Eight Board members nominated by employers and eight by 
members of the railways pension schemes (of which six are 
nominated on behalf of employees and two on behalf of 
pensioners). 
Relevance for climate 
governance
The Trustee has ultimate responsibility for ensuring effective 
governance of climate-related risks and opportunities. These 
responsibilities are discharged, delegated, and overseen as 
described throughout this TCFD report.
Level 1 risk authorities relating to climate change
As stated in the Statement of Investment Principles 
(SIP), the Trustee is satisfied that Railpen has the 
appropriate knowledge and experience for managing 
the investments of the schemes, and it carries out its 
role in accordance with the criteria for investment 
set out in Investment Regulations, the principles 
contained in the SIP, the Trustee’s investment policy 
and any applicable investment guidelines and 
restrictions agreed with the Trustee. Railpen assesses 
the credentials and competence of relevant employees 
prior to appointment and on an ongoing basis 
through rigorous recruitment processes, performance 
assessments, and monitoring of continuous 
professional development. 
The schemes’ actuaries are a valuable source of 
expertise – including on financially material climate-
related risks and opportunities – for scheme 
governance activities. WTW is the RPS Scheme 
Actuary, and their advice includes a focus on the 
assumptions to be used for the triennial valuations 
and other ongoing funding discussions. This includes 
discussion of the potential impact of climate change 
on mortality assumptions; the impact of climate risk 
on financial assumptions is built in through the WTW 
Investment Model. XPS Pensions Group is the Scheme 
Actuary for the BTPFSF, and climate risks are included 
at a high level in future scenario modelling as part of 
forecasting mortality rates within demographic analysis 
as part of the scheme valuation. Such analysis helps 
provide comfort that assumptions in the valuations are 
prudent. 
The following tables describe the composition and 
remit of the committees and other groups depicted in 
figure 4.5.1.
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes

page 23
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Asset Management Committee (AMC)
Composition
Two independent investment experts; two Trustee Board 
directors; Railpen’s Chief Officer; and the Chair, who must be an 
independent non-executive director of the Railpen Board.
Relevance for climate 
governance
Provides advice on the pooled funds, investment planning, macro 
and investment risks, and oversees investment and fiduciary 
activities on behalf of the Railpen Board. The AMC engages with 
the Trustee and the IFC on fund management, Pooled Fund, 
investment and ESG risk issues, including climate change. AMC 
receives a quarterly Investment and Risk Report, which includes 
reporting on ESG issues including climate change. AMC receives 
a KPI report in relation to the Railpen pooled funds, which 
includes a KPI on ESG (including climate change). AMC approves 
Railpen’s Net Zero Plan; reports to the Trustee Board at least 
annually, including a report containing KPIs relating to Railpen’s 
performance; reviews and approves ‘Special Nature’ investment 
transactions, which might include those escalated for reasons of 
climate risk.
Taskforce on Climate-related Financial Disclosure
Railway Pension Investments Limited Board (Railpen Board)
Composition
Three independent non-executive directors; four directors
of the Trustee Board (two employer-nominated and two 
member-nominated); Railpen’s Chief Officer; Railpen’s Chief 
Financial Officer.
Relevance for climate 
governance
Responsible for the governance and management of Railpen. 
Reports to and is accountable to the RPTCL on the management 
of the business. Oversees the AMC.
Defined Contribution Committee (DCC)
Composition
Three employer-nominated and three member-nominated 
directors of the Trustee Board.
Relevance for climate 
governance
Ensures appropriate management and governance of BRASS (the 
main Additional Voluntary Contribution (AVC) arrangement in 
the RPS), AVC Extra, and the Industry-Wide Defined Contribution 
(IWDC) Section of the Railways Pension Scheme, including 
compliance with the requirements of master trust authorisation 
for the IWDC Section. It helps to shape and articulate the 
Trustee’s policy on DC matters. The DCC’s mission is to provide 
DC arrangements, which are designed for the long term and offer 
good value for members, including default investment strategies 
which are suitable for the majority of members throughout their 
scheme membership, and an appropriate range of fund choices 
for those who wish to self-select. IWDC is an authorised master 
trust.
Climate risks
in the schemes

page 24
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Taskforce on Climate-related Financial Disclosure
Fiduciary and Investment Management team
Relevance for climate 
governance
Within Railpen, oversight of climate risk management is 
ensured by the application of the Investment Risk Governance 
Framework and, in an investment context, by Railpen’s Fiduciary 
and Investment Management team. Climate risks are considered 
in their appropriate context, whether covenant, liabilities, or 
investments, and in respect of the latter whether the investment 
relates to public markets, private markets, or real assets.  
Other relevant teams and working groups
Third-party suppliers
Relevance for climate 
governance
The Trustee’s oversight of climate-related risks depends on the 
support of third-party suppliers, for example those rendering 
services relating to climate scenario analysis, GHG data, and proxy 
voting advice. Climate-relevant service providers are appointed 
after a careful selection process driven by procurement specialists. 
Contracts are established to ensure high-quality service delivery 
and enable supplier monitoring. 
Sustainable Ownership team
Relevance for climate 
governance
Railpen’s in-house ESG expert team. Includes a dedicated 
resource overseeing a specific workstream related to climate risk, 
alongside complementary resources that support the analysis and 
monitoring of climate risks and delivery of Railpen’s Net Zero Plan.  
Fiduciary Clients Team
Relevance for climate 
governance
Support the DCC in discharging its duties. Where climate risks 
are material, this would involve supporting the DCC in reviewing 
and monitoring relevant risks. Support the IFC in discharging its 
duties. This includes support with employer covenant ratings and 
establishing integrated funding plans. The support provided to the 
IFC incorporates climate risk, where material.
Investment and Risk Committee (IRC)
Composition
Chief Officer Fiduciary and Investment Management, Director 
of Fiduciary Clients, Director of Fiduciary Management, Director 
of Investment Management (Private Markets and Real Assets), 
Director of Investment management (Public Markets), Head 
of Private Markets, Director of Investment Risk Oversight and 
Sustainable Ownership.
Relevance for Climate 
Governance
Oversight of investment risks relating to investment activities, 
including climate risks, across Total Fund, Pooled Funds, Strategies, 
and Manager Portfolios. Approves the ESG Risk Directive (which 
includes climate change). Is authorised by and directly accountable 
to the AMC. Reviews and approves ‘material’ investment 
transactions, which might include those escalated for reasons 
of climate risk. Railpen’s Director of Investment Risk Oversight 
and Sustainable Ownership is on the IRC, adding further climate 
expertise to the committee. 
Level 2 risk authorities relating to climate change
Climate risks
in the schemes

page 25
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
4.6 Training, Trustee Knowledge and 
Understanding
This section describes the training opportunities 
provided for Trustee directors and relevant employees 
in relation to climate change risks and opportunities. 
Trustee directors have a comprehensive training 
programme on appointment and throughout their 
tenure. They complete training skills analyses and a 
programme of training and workshops is provided, 
designed to support individuals and the Board as a 
whole, and facilitate effective succession planning 
based on the Board’s skills matrix. All Trustee directors 
must achieve a minimum standard of Trustee 
Knowledge and Understanding (TKU) that meets 
The Pensions Regulator’s (TPR) requirements, and 
are required to complete the Trustee Toolkit prior to 
appointment. A wide range of training is offered by 
external providers and Railpen, including training 
on the unique characteristics and complexity of the 
railways pension schemes. To further support Trustee 
directors, they can access information relevant to their 
roles online, alongside all Board and committee papers.
The Board’s skills matrix was updated to include 
reference to climate change in line with TPR’s 
recommendations on good practice.
In respect of the identification, assessment and 
management of climate risks in particular, the Trustee 
Board undertakes training at least annually. This has 
included understanding how scenario analysis works, 
why climate change poses a material financial risk, and 
its relevance to overall risk management. Recognising 
that the Trustee directors themselves delegate the act 
of identifying and assessing climate risks, the objective 
of the training is not to achieve technical mastery, 
but rather to empower the Trustee directors with the 
ability to challenge the risk information they receive 
from others. The Trustee directors receive training and 
engagement on other aspects of risk management 
outside climate change (for example on the general 
Investment Risk Governance Framework), further 
supporting the governance of climate risk.
The 2023 Trustee training session on climate change 
included a review of the updated TCFD regulations, 
updates to the TCFD report, and Railpen’s work in 
climate stewardship. The extent of Trustee training 
and level of engagement with Railpen’s Sustainable 
Ownership team are reviewed and agreed each year.
As the primary adviser to the Trustee, Railpen also 
undertakes training on climate change and has a 
dedicated Sustainable Ownership team, as detailed 
in section 4.5 above. Railpen has appointed a range 
of suppliers to support climate risk management, 
covering GHG data, scenario analysis, proxy advice, 
amongst other areas. The appointment of high-quality 
service providers and external fund managers provides 
a valuable source of information and discussion. The 
Trustee and Railpen have the opportunity to attend 
conferences to further build climate change expertise, 
and engage in industry collaboration and knowledge 
sharing through a range of industry initiatives (see 
section 6.4.3).
4.7 Risk monitoring 
The Trustee has approved an annual programme of 
engagement with Railpen’s Sustainable Ownership 
team, with clear objectives relating to the fulfilment of 
regulatory, fiduciary, and disclosure requirements (now 
and forthcoming) in respect of environmental, social, 
and governance (ESG) issues including climate change. 
The Trustee is satisfied that, at the present time, the 
governance and risk monitoring arrangements in 
place are sufficient. This is, however, reviewed at least 
annually. 
The Trustee receives a quarterly Sustainable Ownership 
report, which includes reporting on climate-related 
matters. The quarterly reports contain information 
related to integration (which when relevant, may 
include the consideration of climate risk in investment 
decision-making), active ownership (engagement and 
voting data including on climate risks), and the climate 
transition. Separately, the Trustee has received four 
additional climate-related updates at Board meetings 
in the past 12 months covering TCFD reporting. In the 
round, climate risks have been a substantive agenda 
item in the past 12 months.
The Trustee, including via the Audit and Risk 
Committee, agree the key Trustee and scheme risks, 
including risk appetite and key risk indicators, and 
review them at least annually. The Trustee monitors 
the status of key Trustee and scheme risks at least 
quarterly, and looks to embed a risk culture and ensure 
risk is considered in all Trustee decision-making.
Railpen’s Enterprise Risk and Company Secretariat 
teams support the Trustee in an annual review of 
its risk register. This includes reviews of the risks 
associated with those undertaking scheme governance 
activities and other significant suppliers. Supplier 
service levels are also monitored through the receipt 
of KPI reports and other relevant means. The specific 
frameworks and tools used to monitor climate risks are 
detailed in section 5.
All Trustee Board reports are required to include a 
‘Risks’ section – which should include climate-related 
risks and compliance with regulatory requirements, 
where relevant – for the purposes of Trustee discussion 
and challenge. Examples of recent challenge provided 
by the Trustee include interrogating the metrics 
and targets proposed, including the stringency and 
potential unintended consequences of climate targets, 
and other challenges related to TCFD reporting. 
Risks are mapped to the Trustee’s enterprise risk 
management system provided by a third-party supplier 
of enterprise risk management software. The risks in 
this software tool are actively monitored for changes 
to risk scores, emerging risks, and developments in 
the control environment. Other risk authorities within 
the Investment Risk Governance Framework offer 
challenge on the Trustee’s behalf, including when 
appraising new investment transactions (in this setting, 
challenge is typically offered by IRC or an ILC).
The extent of Trustee time devoted to monitoring 
climate-related risks is reviewed annually. The 
production of annual TCFD reports provides a natural 
focal point for climate risk monitoring at Trustee-level 
and detailed discussion. 
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes

page 26
The Asset Management Committee (AMC) receives an 
Investment and Risk Report, which includes Sustainable 
Ownership (including climate change) reporting on a 
quarterly basis. In addition, the AMC is able to request 
ad-hoc information on climate-related matters and 
provide challenge. In addition, the AMC receives a 
quarterly KPI report, which includes an ESG KPI (where 
ESG includes climate change). In turn, the Trustee 
receives an annual update of KPIs from the AMC chair. 
The AMC has oversight of the IRC, which oversees 
Railpen’s climate-related exclusion policies (currently 
applying to companies with significant revenues from 
thermal coal and tar sands).
Railpen’s climate risk monitoring includes fortnightly 
SO team meetings on ESG risks (including climate risks) 
at key portfolio holdings, quarterly portfolio reviews, 
external manager monitoring, company engagement, 
and reviews of climate metrics and data. 
Report
Content
Scheme Report 
and Accounts 
Includes a detailed ‘Implementation Statement’, explaining how the 
Trustee has fulfilled its Statement of Investment Principles (SIP), including 
detail on sustainable ownership, including climate change. 
It also includes a link to the TCFD report. 
Annual TCFD 
report
A report delivering to the Regulations.
Stewardship 
report
An annual report covering the 12 principles of the Financial Reporting 
Council’s UK Stewardship Code. The report includes climate-related 
information in several areas.
Voting 
disclosure
A portal available on Railpen’s website detailing the outcomes of Railpen’s 
voting decisions, which includes climate-related voting.
Sustainable 
Ownership 
review
A brief, member-focused document explaining Sustainable Ownership 
activities (including, but not limited to climate change) carried out on 
behalf of the scheme membership.
Taskforce on Climate-related Financial Disclosure
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Climate risks
in the schemes
4.8 Reporting
The preceding sections detail the non-public facing reporting on climate-related 
issues within the Trustee and Railpen. In addition, climate-related information is 
reported through the channels shown in figure 4.8.1.
Figure 4.8.1: Key climate-related reporting

page 27
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Climate risks
in the schemes
Metrics and 
targets
Glossary
Appendices
5.1 Overview and climate scenario 
specifications 
Transition and physical risks are identified and assessed 
using quantitative and qualitative approaches. These 
approaches are applied as appropriate for assessments 
of covenant, liabilities, and investments. This includes 
the use of proprietary tools and frameworks developed 
in-house by Railpen, in addition to the analytical 
capabilities of respected third parties. 
Once risks have been identified and assessed, risk 
management is achieved through approaches tailored 
to context (i.e. covenant, liabilities, or investment, and 
the detail of the risk type within each of these areas). 
Depending on the type of risk, actions are taken to 
avoid, reduce, or exploit the risk. Risk management 
activities are described in more detail in the sections 
that follow.
Although the focus of this report is on the 
management of scheme-wide climate risks, the Trustee 
believes a combination of top-down and bottom-up 
perspectives is important for the purposes of analysing 
and managing physical and transition risks. Bottom-
up perspectives are particularly significant in assessing 
(i) employer covenant, and (ii) particular investments 
made on the Trustee’s behalf. 
Ultimately, the schemes utilise a framework of 
Governance, Tools and Analysis, and Management 
(GTAM) for identifying, assessing, and managing 
climate-related risks across the three areas of covenant, 
liabilities, and investment. This is depicted in figure 
5.1.1 and further explained in the report sections 
that follow.
According to the Regulations and Statutory Guidance, 
trustees are required to undertake and report climate 
scenario analysis on a frequency of no less than 
once every three years. Following review and given 
ongoing dynamics in the macro and scheme-specific 
environments, the Trustee has opted not to repeat 
the analysis previously undertaken. These dynamics 
include uncertainty with regards to inflation and 
interest rates, fluctuations in scheme and section 
funding levels, a live programme of section de-risking, 
updates to investment strategy, and the scheme 
valuation. Undertaking point-in-time scenario analysis 
in this operating backdrop would lead to an analysis 
that would be out of date (and potentially misleading) 
soon after completion. As a result, the climate scenario 
analysis presented in the report sections that follow 
derives from previous years’ reporting, and certain 
parametric settings (such as choice of scenarios and 
definition of short, medium, and long term) will be 
unchanged this year. The Trustee intends to undertake 
new climate scenario analysis prior to publishing next 
year’s TCFD report.
5. Climate risks in the schemes, impacts on 
strategy and the actions we are taking
Taskforce on Climate-related Financial Disclosure

page 28
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Climate risks
in the schemes
Metrics and 
targets
Glossary
Appendices
Figure 5.1.1: Governance, tools, analysis and management
Quantitative climate scenario analysis
Short, medium, long term
Qualitative analysis
Sector analysis; policy analysis
Avoid
 Climate exclusions policy
 Due diligence and asset selection
Exploit
Mitigate
 Investing in climate opportunities
 Climate stewardship: Net Zero Engagement Plan     External manager agreements     
   Property tenant engagement      Employer covenant engagement
 Top-down and bottom-up
 Qualitative
 Quantitative
 Approaches
Governance
Six aspects
Tools and analysis
Risk management
Investment Beliefs
1
Documentation 
and processes
2
Roles and
responsibilities
3
Training and 
Trustee Knowledge 
and Understanding
4
Monitoring
5
Reporting
6
Covenant
Liabilities
Investment
Taskforce on Climate-related Financial Disclosure

page 29
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Climate risks
in the schemes
Metrics and 
targets
Glossary
Appendices
5.1.1 Selection of climate scenarios 
Climate scenario analysis is a means by which 
investors can understand the potential financial 
consequences of climate risks in certain plausible 
scenarios. It is important to note that climate scenarios 
are hypothetical constructs that assess sensitivities 
to potential climate change outcomes, not forecasts 
or predictions. The Trustee uses quantitative climate 
scenario analysis to understand the potential impacts 
on scheme liabilities and investment returns. 
Services from Railpen, Ortec Finance, and WTW were 
procured in order for the Trustee to assess, using 
scenario analysis methods, climate-related risks to 
scheme liabilities and investment returns. The following 
scenarios were used: Paris Orderly, Paris Disorderly, 
and Failed Transition. These scenarios are summarised 
in figure 5.1.1.1. The scenarios are developed by 
Ortec Finance12 as part of its Climate MAPS tool. The 
mortality impacts in different scenarios are inferred 
from modelling provided by WTW. The Trustee, on 
the advice of Railpen, selected these scenarios having 
regard to the following criteria:
n Plausibility – national and international climate 
agreements on limiting GHG emissions, and given 
recent trends in emissions growth.
n Statutory Guidance – aside from the requirement 
to consider a scenario within a temperature 
warming range of 1.5-2C above pre-industrial 
temperatures, the Trustee agrees with the
       Guidance to consider different scenarios with 
the same temperature outcome, in addition to a 
higher temperature outcome. 
Figure 5.1.1.1: Description of the climate scenarios selected by the Trustee 
Paris Orderly transition
Paris Disorderly transition
Failed transition
Use case
Tests exposure to the risks / 
opportunities from the systemic 
drivers of an orderly transition 
and locked in physical risk
Shows resilience of the portfolio 
to sudden transition triggering 
a market dislocation centred on 
high emitting stocks
The main focus of this scenario 
is physical risk, results show the 
exposure to plausible, severe 
climate change impacts
Risk transmission and 
key assumptions
n	
Large transition impact 
due to policy measures 
and technology drivers
n	
Transition is assumed 
to occur as smoothly as 
possible
n	
Market pricing-in dynamics 
occur smoothed out over 
the 2020-2025 period
n	
Physical impacts occur 
up to 1.5/2°C which are 
greater than today but still 
much less than under a 
Failed Transition
n	
Large transition impact 
due to policy measures 
and technology drivers
n	
Transition has disruptive 
effects on financial markets 
with repricing followed by 
a sudden sentiment shock 
and stranded assets in 
2024/2025
n	
Physical impacts occur 
up to 1.5/2°C which are 
greater than today but still 
much less than under a 
Failed Transition
n	
Limited transition impact 
economies follow the 
business as usual track 
without additional new 
policy measures
n	
Severe physical impacts 
occur and continues to 
increase over time, both 
gradual physical changes, 
as well as more frequent 
and severe extreme 
weather events
n	
Markets price in physical 
risks up to 2050 by end 
of this decade, and price 
in post 2050 physical 
risks from the mid-2030s 
onwards
Mortality impacts
By 2050, life expectancy13 
increases by around 3 years
By 2050, life expectancy 
increases by around 2.25 years
By 2050, life expectancy is 
essentially unchanged
Temperature 
outcomes
n	
Average temp increase of 1.6°C by 2100
n	
In line with: Emissions ≈ IPCC RCP 2.6
n	
97% probability of limiting warming to 2°C and c.29% 
probability of limiting to 1.5°C.
n	
Expected global warming 
of 3.8°C by 2100
n	
In line with: Emissions ≈ 
IPCC RCP 6.0
12	 Further information on Ortec Finance’s Climate MAPS 
model is available at https://www.ortecfinance.com/en/
insights/product/climate-maps
13	 In this table, ‘life expectancy’ means the number of years 
after the age of 60 lived by an average male pension 
scheme member. Life expectancy increases in this table 
ignore potential improvements or deteriorations to life 
expectancy that could result for reasons other than climate 
change. 
Taskforce on Climate-related Financial Disclosure
n Simplicity – there is no limit to the number of 
scenarios one could compute for systems so 
complex and long term; in order to facilitate 
effective risk management, it is necessary to 
streamline and simplify the scenarios in use.

page 30
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Climate scenario analysis on the assets of the railways 
pension schemes was first undertaken in 2019, ahead 
of it becoming a regulatory requirement. In the years 
since, the uptake of climate scenario analysis by 
investors has increased, and the sophistication and 
reliability of climate scenario models has improved. 
Nevertheless, the usefulness of climate scenario 
analysis remains challenged by the following limitations 
and assumptions:
n Time lags in the scientific and economic data that 
are used as model inputs.
n Climate scenario analysis depends on climate 
scientific modelling. If the scientific modelling is 
precautionary, this might lead to an under-estimate 
of physical risks and their financial impacts.
n The need to use proxies for modelling climate 
risks in investment portfolios. These proxies 
might be imperfect representations of the actual 
investments in the schemes’ investment portfolios.
n Typically, climate scenario analyses assume 
investment strategy remains constant for many 
decades, whereas this is unlikely to be the case.
n Actual climate-induced mortality impacts might be 
influenced by exogenous factors such as lifestyle 
changes and public health interventions.
n Challenges in identifying a probability for a given 
climate scenario (climate scenario analysis tends to 
focus on impact rather than likelihood).
n The requirement to make assumptions about when 
climate risks will be priced into asset values.
Further limitations are described in section 5.3. Overall, 
climate scenario analysis is useful for identifying 
outliers and direction of travel, rather than pin-point 
accuracy.
5.1.2 Selection of time horizons 
The financial impacts within climate scenarios are 
time-sensitive – the impacts in a given scenario might 
be different in the short term compared to the long 
term. For example, transition risks might be a dominant 
influence in the short term, but physical risks might 
dominate in the longer term. In the context of climate 
scenario analysis, the Trustee defines short, medium, 
and long term in the following way:
Figure 5.1.2.1: Trustee’s definition of short, medium, 
and long term in the context of climate scenario 
analysis.
A significant majority of assets in the schemes are 
invested to fund open defined benefit sections. 
Therefore the investment strategy of the schemes 
is long term, and the shared Trustee and Railpen 
Investment Beliefs also make explicit reference to the 
long term. As such, we believe the time horizons in 
figure 5.1.2.1 are appropriate for the schemes.
When analysing climate impacts to scheme liabilities, 
the Trustee focuses on the long-term horizon (40 
years). When used in climate scenario analysis, shorter-
term horizons tend not to show funding impacts 
significantly different to the climate agnostic baseline. 
The time horizons considered for the DC arrangements 
link to the timeframe for which current members’ 
monies will be invested to and through retirement. It is 
therefore appropriate, when applying climate scenario 
analysis to DC arrangements, to adopt the same time 
horizons as those in figure 5.1.2.1.
For the climate scenario analysis presented in sections 
5.3 and 5.4, RPS asset allocation data, fund ranges, 
and membership liability data are as of 31st December 
2021 (for asset allocation data and fund ranges) and 
31st December 201914 (for membership liability data). 
At the time of first specifying these climate scenarios, 
no actuarial valuation of the BTPFSF had been 
completed since 31st December 201515. Therefore, 
when considering the liabilities, WTW have assumed 
that the discount rates used to determine the Technical 
Provisions will have changed broadly in line with those 
adopted for the Shared Cost sections of the RPS, and a 
funding level of 100% has been assumed.
Following review, the Trustee has not altered its 
definition of short, medium, and long term in this 
year’s TCFD report (see section 5.1). The Trustee will 
review these definitions prior to next year’s TCFD 
report, including the advantages and disadvantages of 
maintaining different definitions of short, medium, and 
long term for different schemes, sections, or types of 
benefit arrangement. 
5.2 Climate risks to employer covenant 
The Pensions Regulator defines the employer covenant 
as “the extent of the employer’s legal obligation and 
financial ability to support the scheme now and in 
the future”. The strength of an employer covenant is, 
therefore, driven by a combination of:
n An employer’s legal obligation to support a 
scheme
n An employer’s financial capacity to do so
n An employer’s longevity – the time horizon over 
which the employer might be expected to support 
a scheme (given the scheme’s duration).
Physical and transition climate change risks could 
have a bearing on an employer’s financial capacity 
and longevity. Such impacts could be wide-ranging 
– affecting, for example, business operations, 
infrastructure, supply chain, and key customers, 
and vary from employer to employer. Such risks are 
analysed by Railpen’s Employer Covenant team and 
overseen, as detailed in section 4.  
5.2.1 Employer covenant and approach to 
climate risk
The RPS is a multi-employer scheme, and employer 
covenant is analysed and reviewed on a case-by-case 
basis. At the present time, the Trustee does not utilise 
model-driven quantitative climate scenario analysis 
when reviewing information on employer covenant.16
Short term
Medium term
Long term
Time
10 years
20 years
40 years
14	 The date of the most recent RPS valuation.
15	 The 2021 BTPFSF valuation was completed earlier in 2023.
Taskforce on Climate-related Financial Disclosure
16	 Where individual employers have undertaken quantitative 
climate scenario analysis, this could be factored into the 
covenant analysis where appropriate.
Climate risks
in the schemes

page 31
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Short, medium, and long-term climate risks (and 
opportunities) are considered within an employer 
covenant context using the following three tiers of 
assessment:
Figure 5.2.1.1: Three tiers of climate risk integration in 
employer covenant analysis
 
This report focuses on the UK policy and sector risks 
tiers noted above. At an employer-specific level, the 
covenant strength of each section within the RPS is 
rated on a 1-6 scale, where ‘1’ is the strongest rating 
and ‘6’ is the weakest17. The covenant longevity of 
each section is also rated, as either positive, neutral or 
negative, based on an analysis of (i) Sector / industry-
specific characteristics (including climate-related risks 
and opportunities), (ii) Employer-specific governance 
and management qualities, and (iii) Employer-specific 
longevity characteristics. The overall employer covenant 
ratings therefore take account of credit risk and 
longevity as well as specific legislative, contractual 
or other structural support from the rail industry or 
central, local and/or devolved government, where 
appropriate. We intend to introduce employer-specific 
analysis in future reports, as appropriate, taking 
account of Trustee / employer confidentiality concerns.
Rail in the UK is considered the most environmentally 
friendly form of mass transport, and there are a 
number of initiatives underway within the UK railways 
industry to decarbonise further and to encourage 
a passenger and freight modal switch towards rail. 
Where climate factors are financially material to the 
employer and/or its sector and could impact on the 
employer’s ability to support the section now and the 
future, they could impact the covenant and longevity 
rating positively or negatively. To date, a number of 
RPS’ sponsoring employers have already witnessed 
physical climate-related risks and opportunities e.g. 
weather-related resilience of railway infrastructure, 
and transitional risk including the reduction of coal 
loads within the rail freight industry following the 2015 
doubling of carbon tax on coal. The covenant impacts 
of such physical and transitional risks and opportunities 
have been considered at the sector/sub-sector level, 
and take account of the specific covenant strength 
characteristics on a section-by-section basis. 
To date, Railpen has completed a longevity analysis of 
each sector within which RPS sponsoring employers 
and their wider groups operate. This analysis includes 
consideration of the climate-related risks and 
opportunities prevalent within each sector.
Thinking about climate risks as a regular and required 
item within employer covenant analysis is a relatively 
new and developing discipline. Railpen’s forward-
thinking team co-authored an innovative industry 
guidance document in 2022, which supports others in 
analysing climate risks in the context of an employer 
covenant18. 
5.2.1.1 Supplementary data on RPS 
covenant
The RPS administers pensions for more than 150 
companies operating in the rail industry, spanning 
sectors including government-linked bodies like 
Network Rail and the train operating companies 
(TOCs); freight operating companies; train building, 
maintenance and signalling; passenger transport; 
infrastructure; ROSCOs (Rolling Stock leasing 
Companies); consultancies; IT; support services; and 
others. The BTPFSF is a separate scheme, albeit its 
sponsoring employer, the British Transport Police 
Authority, also sponsors a section of the RPS.
Figure 5.2.1.1.1: summarises how the assets under 
management (AUM) of the RPS and BTPFSF are split 
between the different categories / sectors.
Employer covenant sector by AUM
Taskforce on Climate-related Financial Disclosure
UK policy
UK government climate policy, support 
and regulation of the rail industry 
(current and forthcoming)
Sector risks 
(physical and 
transition risks)
Sector-based analysis of climate risks 
and net-zero alignment in UK rail, and 
the sub / other sectors within which 
RPS sponsoring employers and their 
wider groups operate  
Employer-
specific risks
Employer covenant specific climate 
risks, net-zero alignment assessment, 
adaptation potential and mitigation 
efforts
17	 As a separate scheme, however, the BTPFSF is not captured 
within this 1-6 rating scale. The BTPFSF covenant strength 
is rated as ‘strong’, consistent with a ‘1’ rating on the RPS 
scale.
18	 Employer Covenant Practitioners Association, January 
2022, “Reflecting climate change impact and risks in 
employer covenant assessments”.
Climate risks
in the schemes
Passenger transport 
(non-TOC)
Freight
Infrastructure
Consultancies
Train building, maintenance
& signalling
ROSCOs
IT
Support and other
services
Network Rail
TOCs
Non-TOC 1s
2%
 
6%
3%
2%
4%
1%
1%
1%
25%
41%
15%

page 32
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
As illustrated in figure 5.2.1.1, the majority of the 
AUM relate to sections sponsored by government-
linked bodies (over 80%), including the Network Rail 
section (covenant-rating ‘1’), the 27 Train Operating 
Company (TOC) sections (covenant rating 1) and 11 
other ‘covenant 1 / strong’ rated sections who benefit 
from legislative, contractual or other structural support 
from the rail industry or central, local and/or devolved 
government e.g. Rail Safety and Standards Board 
(RSSB) and British Transport Police. The aggregate 
of those sections remains the focus of this report. 
As of last year, we also analyse the climate-related 
covenant issues in relation to the rail Freight Operating 
Companies (FOCs) and the train builders, maintenance 
and signallers, which together account for a further 
c.10% of AUM. The tail of smaller RPS sections 
(individually each has less than £1bn in AUM, and in 
aggregate these sections account for less than 10% 
of total scheme AUM), will be covered in future TCFD 
reports, as appropriate.
The Department for Transport (DfT) explain the 
importance of the rail network to the UK economy: 
“The rail network plays a vital role in our transport 
system and the UK economy. It is a fast, safe and 
reliable way of moving people and goods over 
long distances, in and around our city centres and 
internationally. It enables people to get to work, visit 
friends and family, and do business. It also enables 
the efficient movement of goods from ports, quarries, 
and distribution centres to urban centres and helps 
alleviate the need for trucks on roads.”19 
Given the social and economic importance of the 
railways in the UK, the UK government plays a central 
role in the UK rail industry. The resultant regulatory and 
contractual relationships between government and key 
rail companies mean that a number of RPS sponsoring 
employers benefit from direct and indirect government 
support. 
From an employer covenant perspective, RPTCL 
recognises where the employer’s ability to support the 
pension liabilities of a section on an ongoing basis 
benefits from specific legislative, contractual or other 
structural support from the rail industry or the UK 
government, usually demonstrated by one or more of 
the following: 
n Specific legislative provisions
n A Crown guarantee
n Written correspondence from UK central or local
        government bodies, or devolved government
      bodies, or
n Other specific documented arrangements 
      confirming the effective ongoing support by the 
      industry to the scheme.
5.2.2 UK policy
Climate transition risks and opportunities arise as we 
move to a more sustainable, low-carbon economy. In 
the UK, the transition is likely to be driven partly by 
changes in legislation and technologies, the impacts 
of which will vary widely by sector and geography. 
Transport is the largest contributor to UK domestic 
greenhouse gas (GHG) emissions, responsible for 24% 
in 2020. As shown and explained in figure 5.2.2.1, 
rail is one of the least carbon-intensive forms of mass 
transport.
Cars and taxis
Heavy goods vehicles
Light duty vehicles
Domestic shipping
Buses and coaches
Rail
Domestic aviation
Other road transport
Other transport emissions
UK domestic transport emissions
- Rail
- Domestic aviation
- Other road transport
- Other transport
1%
1%
1%
2%
- Heavy goods vehicles
19%
- Light duty vehicles
16%
- Domestic shipping
5%
- Buses and coaches
2%
- Cars and taxis
52%
% Greenhouse
gas emissions
by transport
mode, 2020
Total domestic transport
emissions = 98.8 MtCO2e
Figure 5.2.2.1: Illustration and description of GHG intensity by transport mode in the UK. 20
Taskforce on Climate-related Financial Disclosure
19	 Quotation taken from Department for Transport (DfT) “Rail Environment Policy Statement”, July 2021
20	 Department of Transport document; “Decarbonising Transport: A Better, Greener Britain – One Year On”.
Climate risks
in the schemes

page 33
Taskforce for Climate-related Financial Disclosure
In 2020, greenhouse gas emissions from rail made 
up just 1% of the UK’s domestic transport emissions, 
despite rail accounting for 9% of passenger miles 
travelled in Great Britain (noting this passenger miles 
figure excludes Northern Ireland). In terms of the 
movement of goods, rail freight trains emit around 
a quarter of the CO2 equivalent (CO2e) emissions 
of HGVs, per tonne mile travelled. Even though rail 
is lower carbon than other long-distance transport 
modes, it is becoming even less carbon intensive as the 
National Grid decarbonises.
At a high level, UK government policy aimed at 
decarbonising transport in the short term is to 
encourage a modal shift away from the more carbon-
intensive modes, towards rail, for passengers and 
freight. It also aims to encourage the rail industry to 
decarbonise further in the short, medium and long 
term.
The UK government’s ‘One Year On’ report recorded 
that between 2019 and 2020, transport emissions fell 
by 19%, largely as people stayed at home in response 
to the COVID-19 pandemic. Actual transport emissions 
for 2020 – and provisional estimates for 2021 – are 
mapped onto the trajectory published in the original 
Decarbonising Transport: A Better, Greener Britain 
document (see section 5.2.2.1). To meet net zero by 
2050, and the UK government’s carbon budgets, 
the transport industry must continue to make rapid 
progress.
The Williams-Shapps Plan for Rail White Paper 
introduced the creation of Great British Railways 
(GBR). The vision was that as a public body with 
responsibility for a major national asset, GBR would 
have a responsibility to put environmental sustainability 
at the heart of its operations. The establishment of 
GBR, a single organisation responsible for track, trains 
and stations, would better support the delivery of 
environmental objectives. 
Whilst political uncertainty appears to have hampered 
progress on the creation of GBR, there also appears 
to be cross-party support for the creation of such an 
Integrated Rail Body (IRB). For continuity purposes, we 
continue to use the term Great British Railways (GBR) 
within this report, in the expectation that the climate-
related plans published to date are likely to be adopted 
by any such IRB.
A specific duty will be placed on GBR to consider 
environmental principles across all its operations. It will 
be accountable for, and will lead to the sector’s delivery 
of, a more environmentally sustainable rail network in 
line with its mission to make the railway the ‘backbone 
of a cleaner, greener public transport network’.
Against this backdrop, in July 2021, the Department 
for Transport (DfT) set out its key climate-related policy 
positions in respect of transport in general, and rail in 
particular, within two key documents:
n Decarbonising Transport: A Better, Greener Britain
n Rail Environment Policy Statement: On Track for a 
Cleaner, Greener Railway
160
140
120
100
80
60
40
20
0
1990
1995
Outturn
Baseline
Decarbonising Transport projection
2000
2005
2010
2020
2015
2030
2035
2025
2040
2050
2045
Short-term COVID-19 uncertainty
2021 provisional CO2 statistic
X
MCO2e
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Figure 5.2.2.2: Decarbonising Transport domestic transport greenhouse gas projection including latest 
outturn data
Climate risks
in the schemes

page 34
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
5.2.2.1 Decarbonising Transport: A 
Better, Greener Britain
The Decarbonisation Plan highlights electrification as 
the primary method of decarbonising the majority of 
the rail network. The report claims that electrification 
will not only decarbonise existing rail journeys but also 
has the potential to attract new passengers to rail.
The report notes that in the last 20 years, while the 
cost of motoring fell by 15%, over the same period 
the cost of rail fares went up by over 20%. The plan 
calls for simpler, cheaper fares for public transport to 
help make trains (as well as buses) better value and 
more competitively priced. The report outlines that 
the government will also look to newer technologies 
such as hydrogen and battery trains, deploying the 
most appropriate technology for each route across the 
network. The plan – which will include all transport 
modes but particularly road, rail and aviation – sets 
a transition pathway to achieving net-zero carbon 
emissions across the transport sector by 2050.
The rail-specific elements within the Decarbonisation 
Plan include:
n Electrification: To deliver an ambitious, 
	sustainable, and cost-effective programme of 
	electrification guided by Network Rail’s Traction 
	Decarbonisation Network Strategy.
n Hydrogen/battery technology: Supporting 
the development of battery and hydrogen trains 
and will deploy them on the network as we 
decarbonise.
n Network capacity: Building extra capacity on the 
UK’s rail network to meet growing passenger and 
freight demand and support significant shifts from 
road and air to rail.
n Modal shift: Government will work with 
industry to modernise fares ticketing and retail to 
encourage a shift to rail and cleaner and greener 
transport journeys.
n Freight: Government will introduce a rail freight 
growth target to encourage the continued growth 
of rail freight.
These initiatives are further developed within the Rail
Environment Policy Statement.
5.2.2.2 Rail Environment Policy 
Statement: On Track for a Cleaner, 
Greener Railway
The purpose of the Rail Environment Policy Statement 
(REPS) is to set a clear direction for the rail industry 
on environmental sustainability and to outline policy 
priorities for the Sustainable Rail Strategy. The report 
emphasises how the reform of the rail sector provides 
an opportunity to transform rail sustainability, noting 
that in order to support a green recovery from the 
pandemic, railways can shift away from polluting 
forms of transport such as planes, cars and lorries, 
to become the best option for long-distance travel, 
and improve the whole journey experience. This will 
include making it easier to get to and from stations by 
walking, cycling or other public transport; supporting 
green infrastructure outside cities; modernising fares to 
compete with air travel; improving freight connectivity 
through interchanges, and creating better links with 
freeports.
There is a notable emphasis in the report on the 
role that rail will have to play in maximising the 
environmental benefits of moving freight, with GBR 
having a ‘statutory duty’ to promote rail freight. The 
report also notes that GBR will develop a methodology 
to better assess the value of rail freight to support 
decision making, building on the ‘Value of Rail Freight’ 
report commissioned by the Rail Delivery Group in April 
2021.
The plan lists the following priorities for the rail 
industry:
n  Net-zero GHG emissions from trains by 2050.
n 	An ambition to remove all diesel-only trains from 
the rail network by 2040.
n 	A commitment to a sustainable delivery 
programme of electrification that delivers a higher-
performing net-zero railway.
n 	Air quality targets will be set for all parts of the 
railway, with the ambition of meeting those 
targets by the end of 2030.
n 	The industry will be required to develop air quality 
improvement plans for all stations identified as 
having poor air quality.
n 	Network Rail will achieve net-zero biodiversity by 
2024 and biodiversity net gain by 2035.
n  In total, 100% of Network Rail’s cars and vans will 
be zero emission by 2027.
n 	Zero waste from railways activities will go to 
landfills by 2025.
n 	Targets will be set for renewable energy generation 
and use at stations.
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes

page 35
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Traction decarbonisation/electrification plays a 
significant role in the rail industry’s environmental 
plans. This includes decarbonising rail freight by 
electrifying more of the network to enable electric 
rail freight to run on more routes and developing 
further interventions, in partnership with industry, 
to help Freight Operating Companies (FOCs) have 
the confidence and business assurance to invest 
in new rolling stock to overhaul their largely diesel 
fleets. There is a defined aspiration to achieve a 
stable, ongoing rail electrification programme that 
learns from past mistakes. GBR will lead an efficient 
electrification programme, working with funders and 
suppliers to minimise the cost and disruption of further 
electrification. Future rolling stock procurements will 
need to consider how to enable the use of hydrogen 
and battery trains where they are the best way to 
deliver decarbonisation targets.
In relation to Passenger Modal Shift, the policy is to 
make rail the first option for suitable journeys in the 
UK and encourage commuters to cycle, walk or take 
public transport to and from rail stations, making their 
journey environmentally sustainable from door to door. 
In the future, each Passenger Service Contract will be 
designed by GBR to support the needs of passengers 
and the whole network as part of an integrated 
system.
In relation to Freight Modal Shift, the government is 
supportive of modal shift from road to rail, wherever 
possible, to reduce emissions from the freight sector. 
The government will introduce a rail freight growth 
target for all areas of the network to provide a 
common objective for industry collaboration, help 
provide private operator investment confidence, and 
galvanise action across local partners and the industry. 
To further grow rail freight in 2021/22, the government 
invested £20m in the Mode Shift Revenue Support 
(MSRS) scheme. In 2022 to 2023, MSRS helped 
remove 900,000 lorry journeys from Britain’s roads, 
saving almost 40,000 tonnes of carbon dioxide (CO2) 
emissions. DfT is undertaking a comprehensive review 
of the MSRS scheme, and a call for evidence was 
launched on 4 December 2023. It will continue to work 
with the rail freight industry, Innovate UK, and the 
Rail Safety and Standards Board (RSSB) to look at how 
best to progress options on innovation, research and 
development to reduce emissions from rail freight21.
As noted above, political uncertainty around the 
future of GBR to a degree hampered progress in these 
areas during 2022 and 2023. Some progress has been 
made, e.g. commitment to further electrification of 
lines as part of the Integrated Rail Plan and funding 
for a fast-charging trial for battery-only trains, and the 
government’s publishing a rail freight growth target 
– for at least 75% growth in freight carried by rail by 
205022. In February 2024, the government published 
a Draft Rail Reform Bill23, reaffirming the government’s 
commitment to the creation of an IRB, bringing 
together the primary legislative measures, which form a 
key part of delivering rail reform envisaged by the Plan 
for Rail. We expect that this should reinvigorate the 
development of the rail decarbonisation programme 
ahead of GBR / IRB becoming formally established, 
albeit we note the uncertainty that remains in this area.
These policies and plans help clarify the transition 
risks and opportunities facing the UK rail sector, and 
challenge the industry to develop its own plans to meet 
them. In addition, unlike most other UK sectors, the 
rail industry is already facing the challenges of physical 
climate-related risks. 
5.2.3 Sector risks: Physical risks
Britain’s railway operates in a wide range of weather 
conditions and is one of the safest in Europe. The 
increasingly frequent severe and prolonged weather 
events due to climate change present a growing 
challenge, with climate changes already affecting 
the infrastructure, causing significant disruption to 
the network with impacts felt by customers, staff 
and the communities in which we live and work. 
For instance, heavy rainfall may require delays to the 
arrival or departure of trains. In more challenging 
cases, trains can be stopped from running, and railway 
infrastructure may be obstructed and damaged, 
resulting in costly repairs. In rare, more extreme cases, 
there is a much bigger effect, with widespread delays, 
the need for more substantial repair work and the 
potential for severe safety consequences. 
Network Rail owns, operates and develops Britain’s 
railway infrastructure including 20,000 miles of track, 
30,000 bridges, tunnels and viaducts and thousands 
of signals and level crossings. Network Rail also 
manages 20 of the UK’s largest railway stations and 
is responsible for running a safe, reliable and efficient 
railway that serves customers and communities. 
Between 2006/07 and 2020/21, Network Rail reported 
that weather-related incidents caused over 322,000 
delay events, 26 million minutes of delays and over 
£1bn in compensation payments.
The figures on page 36 indicate the cumulative costs 
for each weather impact category from 2006/07 to 
2020/21 across the whole network and for England, 
Wales and Scotland respectively. Nationally, the two 
biggest challenges come from wind and flooding 
incidents costing £275m and £223m each. There 
are also significant impacts associated with adhesion 
and snow, each costing more than £100m over the 
same period. While wind, flooding and snow remain 
the top impacts across all three nations, flooding has 
the largest impact in Wales. In Scotland, snow, cold 
and adhesion are greater challenges than elsewhere, 
while England and Wales see more issues related to 
heat, with England seeing the greater impact. Of the 
three nations, Wales shows the greatest impact from 
lightning, relative to other regions.
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes
21	 Rail freight growth target
22	 Rail freight growth target
23	 Draft Rail Reform Bill

page 36
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Figure 5.2.3.1: Cumulative costs by weather impact category from 2006/07 to 2020/21 across the rail network in England, Wales and Scotland
Source: http://www.networkrail.co.uk/running-the-railway/our-regions
Taskforce on Climate-related Financial Disclosure
14
Climate risks
in the schemes

page 37
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Climate risks
in the schemes
Metrics and 
targets
Glossary
Appendices
5.2.4 Sector risks: Transition risks and 
opportunities
5.2.4.1 Government-linked bodies
As noted previously, the regulatory and contractual 
relationships between government and key rail 
companies results in a close proximity between the 
government / DfT, who set (and ultimately fund) high-
level ambitions and policies, and the industry players 
responsible for meeting those challenges and realising 
those ambitions.  
The rail industry is dominated by Network Rail (NR). 
Network Rail Limited (NRL) and its subsidiaries, 
including the section’s sponsoring employer within the 
RPS, Network Rail Infrastructure Limited (NRIL), are a 
‘Non-Classified Arm’s Length Public Body of Central 
Government’. NRL is a not-for-dividend company 
limited by guarantee with a Special Member, the 
Secretary of State (SoS) for Transport. NRIL owns all 
the assets of the group and carries out all the trading 
of the group. The SoS, supported by the DfT and in 
conjunction with the Office of Rail and Road (ORR), 
has a significant level of control over the strategic, 
operational and financial activities of NR, and the 
SoS is accountable to Parliament for the activities / 
performance of NR. As noted within the Williams-
Shapps Plan for Rail, Network Rail is expected to 
become part of GBR, a new public body.
In addition to Network Rail, the Train Operating 
Companies (TOCs) and other covenant rated 1 
employers are additional categories of key rail 
companies where the employer’s ability to support 
the pension liabilities of a section on an ongoing basis 
benefits from specific legislative, contractual or other 
structural support from the rail industry or the UK 
government. GBR is to be created via legislation and 
will become the governing body for the TOCs. The 
Williams-Shapps Plan for Rail sets out that GBR will 
manage costs and revenue decisions for the network; 
that Ministers will hold GBR to account through a 
structured framework underpinned by legislation; and 
that Ministers will have statutory powers to set long-
term strategy and have powers to issue guidance and 
mandatory direction to GBR on any matter, at any time.
The transition risks and opportunities faced by these 
key central rail companies are, therefore to a significant 
degree determined by government, and are inherently 
linked to the government’s own appetite to fund the 
accompanying costs in an efficient manner – one that 
is fair to the taxpayer and the fare-payer. 
Taskforce on Climate-related Financial Disclosure

page 38
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Climate risks
in the schemes
Metrics and 
targets
Glossary
Appendices
Case study: Managing climate-related risks at Network Rail
Since extreme weather events are becoming more 
frequent and intense, the UK rail network will 
likely suffer more damage and greater disruption 
unless there is investment in climate adaptation 
technologies to improve the climate resilience of 
the network. To a large degree, such investment by 
Network Rail provides opportunities for other 
sub-sectors of the railway industry.
In 2020 Network Rail became the world’s first railway 
company to set an approved science-based target 
(SBT) aligned to a 1.5°C temperature outcome. 
Through the initial target-setting process, Network 
Rail worked with Carbon Intelligence to quantify 
Network Rail’s emissions, finding that 66% of overall 
emissions were in the supply chain. To address this, 
they set a target for 75% of their suppliers (measured 
by emissions) to set science-based targets by 2025. 
These targets extend across the entire value chain of 
Network Rail and will require collaboration to reduce 
carbon emissions from Network Rail’s own operations 
and those of suppliers and customers. Since 2021, 
Network Rail has been working on a Supplier 
Engagement Programme to educate suppliers and 
work with them on developing their own
ambitious carbon reduction targets. By engaging 
with the supply chain and asking their suppliers to 
set science-based targets, Network Rail can help drive 
the UK closer to hitting its 2050 net-zero target.                                                                                                                                          
                                                                                                      
Supplier engagement is a task faced with several 
challenges ranging from the accuracy of GHG 
data, securing internal buy-in, and education 
and engagements with very large and complex 
organisations. Ensuring clear objectives backed up 
with data, enabled Network Rail to overcome some 
of these challenges. The data gathering process 
enabled Network Rail to identify 70 high impact 
suppliers, from which Network Rail could collect 
further information to understand the individual 
decarbonisation targets and plans. By collating this 
information, Network Rail were able to develop a 
supply chain emissions reduction roadmap.
The UK government and Network Rail’s extensive 
decarbonisation, adaptation, investment, and supplier 
engagement programme provide strong adaptation 
initiatives and mitigation efforts to the physical risks 
faced by the UK rail industry and set the stage for the 
rail industry to be a ‘climate enabler’ for the UK. 
While the UK government is responsible for setting 
policies and challenges, and Network Rail is primarily 
responsible for meeting those challenges, the 
regulatory and contractual arrangements which 
underpin Network Rail’s funding regime are such that 
Network Rail will only need to meet the challenges 
that the UK government agree to fund. This results 
in the covenant strength of the Network Rail 
section, and those of the other sections sponsored 
by government-linked bodies, being substantially 
protected from the challenges that the employers 
themselves face.   
In addition, the UK government and Network Rail 
climate transition roadmap provides a template for 
other employers in the UK rail industry.
Source: Network Rail
Taskforce on Climate-related Financial Disclosure

page 39
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Climate risks
in the schemes
Metrics and 
targets
Glossary
Appendices
5.2.4.2 Rail Freight Operating Companies 
(FOCs)
Rail freight is recognised as one of the least 
carbon-intensive ways of moving freight. The headline 
statistic often quoted is that each freight train removes 
76 HGV lorries from the UK roads.
Rail freight is a critical part of the UK transport 
network, linking businesses with ports, quarries, 
suppliers and other supply chain nodes. The COVID-19 
pandemic highlighted the importance of rail freight 
to the UK economy as a critical part of the UK supply 
chain – the retail and construction sectors in particular.
UK rail freight has also been noted as having an 
important role in the UK achieving its statutory 
net-zero target. Some commentators have stated 
that a much more pronounced shift away from road 
haulage is required for the UK as a whole to meet 
its decarbonisation targets. As companies begin to 
increase their focus on supply chain (scope 3) carbon 
emissions to achieve net zero, this should further 
encourage a modal shift and increase the demand for 
rail freight.
The government is supportive of rail freight and is to 
introduce a rail freight growth target for all areas of 
the network. On its creation, GBR will have a ‘statutory 
duty’ to promote rail freight. 
In June 2022, the DfT published the ‘Future of freight: 
a long-term plan’, which sets out a commitment to a 
long-term, cross-modal approach to the freight and 
logistics sector – covering road, rail, maritime and air.  
The report highlights the importance of the freight 
and logistics sector as a whole – including its role 
in delivering essential goods (medicines, food, fuel 
etc), contributing £127bn p.a. to the UK economy, 
and employing >2 million workers. The report is 
the government’s and sector’s joint response to the 
challenges, and will be overseen by a refreshed Freight 
Council model, holding the government and sector to 
account on the delivery of these commitments over 
the coming years.
Taskforce on Climate-related Financial Disclosure

page 40
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Climate risks
in the schemes
Metrics and 
targets
Glossary
Appendices
Notwithstanding the already strong green credentials 
of the FOCs, the industry is keen to retain and build 
on these by further reducing its carbon footprint. 
This will be achieved primarily through switching to 
less carbon-intensive forms of traction. This is not 
without challenges. In keeping with the issues faced by 
transport in general:
n Further research and development is required into 
the fuels and technology of the future.
n There is investor uncertainty, as there is a lack 
of clarity around the energy infrastructure and 
supply network that will be in place in the decades 
to come – along with concern that it will come at 
a disproportionately high cost (e.g. the recent 
energy price volatility, which resulted in some 
FOCs parking up some of their electric 
locomotives).
n There are investor concerns about the risk of 
stranded assets, and first-mover disadvantages 
create a barrier to investment in new technologies. 
Therefore industry and government must work 
together to build greater certainty and give 
investors the confidence to invest in new assets, 
and new energy / fuel generation.
FOC-specific challenges include the following:
n Although 38% of the rail network is electrified,	
only 5% of freight is transported using electric 
traction – as even on routes where the majority 
of the network is electrified, there are lengths 
of the track that are not, meaning diesel is the 
preferred option.
n There are only 10 bi-mode (diesel / electric)  
locomotives (2%), and only 10% of  locomotives  
are electric across the FOCs’ fleet.
n Electrification of the rail network remains the key
	
limiting factor for wider adoption of alternative 
(non-diesel) traction. Whilst this is not feasible 
on some parts of the network, the pathway to 
alternative technologies remains unclear. While 
low-carbon fuels have been successfully deployed 
(e.g. HVO), cost barriers prevent wider use.
Unlike the TOCs, the FOCs operate as private-sector 
companies in the UK so, unlike Network Rail and TOCs, 
are subject to non-publicly funded transition risks, as 
experienced in 2015.
Despite these challenges, the climate-related 
opportunities, including the ever-growing desire and 
push-factors to switch freight from road to rail, results 
in a positive medium and long-term outlook for the 
FOCs
Taskforce on Climate-related Financial Disclosure
Future of Freight: a long-term plan, June 2022
n	The UK rail freight is a fundamental part of the chain which is critical 
to the UK economy and to achieving net zero. This has been highlighted
	
through recent events (COVID-19 etc) and the Future of Freight plan	
issued by DfT in June 2022 sets out strategic priorities for:
	
-	 considering the national freight network more holistically, allowing for 
	
better decisions around infrastructure investment
	
-	 addressing net-zero transition challenges, e.g. providing greater clarity 
	
over rail electrification plans, to allow the FOCs to invest (e.g. in new 
	
locos) and reduce the risk of stranded assets
	
-	 reviewing planning approval processes and contents (noting the 
	
importance of strategic rail freight interchanges)
	
-	 addressing workforce shortages, negative perceptions in the industry, 
	
and the lack of diversity
	
-	 improving innovation and the adaption / roll-out of technological 
	
advances within the sector.
n	This plan is based on the wider freight and logistics sector (i.e. also 
includes road, maritime and air), and we view this more joined-up 
approach as positive noting that modal shift, from road to rail, remains a 
key focus to alleviate road congestion and reduce carbon emissions.

page 41
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Climate risks
in the schemes
Metrics and 
targets
Glossary
Appendices
Taskforce on Climate-related Financial Disclosure
5.2.4.3 Train-builders, maintenance and 
signalling companies
Climate / environmental impact on new build 
pipeline
As noted previously, the DfT has challenged the rail 
industry to remove all diesel-only trains from the 
network by 2040. The Scottish government is aiming 
for a net-zero railway by 2035. This is an example of 
climate-related ‘Transition Risk’ for the industry, but for 
train builders, can also be viewed as a climate-related 
opportunity.
To remove the diesel trains from the network, fleets 
with greener traction need to be procured. As at 31 
March 2022, 18% of the UK passenger rolling stock 
was diesel only (2,746 out of a total of 15,277 railways 
vehicles)24. Only seven of the TOCs had all-electric fleets 
as at 31 March 2022.   
ScotRail has announced it will replace all diesel trains 
by 2035, by replacing 65% of its fleet between 2027 
and 2035. 
Cross Country’s ‘youngest’ diesel trains will be 38-years 
old by 2040, suggesting they will be towards the end 
of their life. 
However, other diesel trains may not be life expired 
by 2040 and new diesels are still being ordered and 
delivered e.g. Transport for Wales is in the process of 
taking delivery of new diesel trains, and the new East 
West Railway is expected to procure new diesel trains.
The increasing prevalence of new fleets presents a risk 
for maintenance companies, as the original equipment 
manufacturer (OEM) typically supplies new rolling stock 
combined with a substantial maintenance contract. 
Some rail industry figures however consider the 
removal of all diesel trains by 2040 as unachievable. 
Slower progress in bringing the new greener traction 
options to the UK market could lead to extended lives 
for existing fleets which presents an opportunity to 
provide more maintenance and overhaul work for the 
existing maintainers.
c2c
Heathrow Express
London overground
Lumo
Merseyrail
Southeastern
TfL Rail
Govia Thameslink Railway
South Western Railway
Avanti West Coast
Greater Anglia
West Midlands Trains
ScotRail
London North Eastern Railways
Northern Trains
East Midlands Railway
TransPennine Express
Great Western Railway
Grand Central
CrossCountry
Chiltern Railways
TfW Rail
Caledonian Sleeper
Hull Trains
0%
25%
75%
100%
100%
78%
84%
22%
16%
89%
11%
100%
65%
22%
13%
41%
16%
43%
23%
77%
63%
34%
100%
100%
100%
100%
100%
100%
100%
100%
50%
Electric
Diesel
Bi-mode or loco hauled
98%
58%
42%
62%
26%
11%
78%
22%
84%
16%
85%
15%
92%
8%
Figure 5.2.4.3.1 UK rail network, proportion of fleet by fuel source
24	 https://dataportal.orr.gov.uk/media/2139/rail-infrastructure-
assets-apr-2021-mar-2022.pdf

page 42
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Climate risks
in the schemes
Metrics and 
targets
Glossary
Appendices
Taskforce on Climate-related Financial Disclosure
Pipeline – network constraints 
Large parts of the network are non-electrified which 
restricts the use of electric traction to replace diesel. 
The roll out of electrification has been slow paced 
with just 1.3 miles of track electrified in financial year 
(FY) 22 and 111 miles in FY21 out of around 6,000 
miles of non-electrified track.
Due to the slow roll out of electrification, the limited 
visibility on further electrification and some routes 
being unsuitable for electrification, alternative ‘green’ 
traction options are under consideration as well as 
an increased use of bi-mode fleets. 
Battery-electric hybrids
n Battery-electric hybrid trains can be used where 
routes are partially electrified and are being 
developed by a range of suppliers, including 
Alstom and Hitachi, in partnership with Rolling 
Stock Companies (ROSCOs). 
n Chiltern Railways is currently in a tender process 
for a battery-electric fleet with expected delivery 
	
in 2027.
Hydrogen trains
n Hydrogen powered trains are also in development 
for the UK market. Rail Safety and Standards Board 
(RSSB) published a Hydrogen Policy and Standards 
Review in October 2022. Further work needs 
to be carried out to understand several areas, 
including safety risks and to confirm technical 
elements (e.g. to determine where on the network 
hydrogen storage tanks would be installed) before 
concluding on the introduction of this technology.
n RPS employer groups have delivered hydrogen 
trains elsewhere in the world and are ready to take 
advantage of this opportunity in the UK. 
Impact on train builders
n These new traction options provide alternatives 
to diesel fleets to meet the government’s 2040 
target. This presents an opportunity for new orders 
for train builders; however, new technology tends 
to be expensive for early adopters, which may act 
as a barrier to these orders being placed.
European Green Deal
Many of the RPS employers in this sector are part of 
large groups, the majority of which are based in Europe 
– Alstom (France), Siemens (Germany), Thales (France) 
and Stadler (Switzerland). Whilst Hitachi is ultimately 
headquartered in Japan, the rail division is based in 
Europe with substantial entities in the UK and Italy.
The European Green Deal is a set of policy initiatives by 
the European Commission with the aim of making the 
EU a carbon-neutral economy by 2050. The Green Deal 
aims to make rail the backbone of its mobility strategy, 
noting it is the lowest carbon form of mass transit. 
There is support for a modal shift of both passengers 
and freight onto rail from other forms of transport such 
as road and air.
n The Green Deal includes a strategy to improve the 
connectivity of major urban areas across mainline 
Europe by rail through the development of more 
high-speed lines.
n This positive view of the rail sector in Europe 
is also illustrated by the decision of the French 
government to ban domestic flights where it can 
be made via a rail journey of under 2.5 hours.
n The EU’s strategy to promote growth in European 
rail is positive to many of the groups which own 
the RPS employers in this sector.
n This has a positive impact on our view of longevity 
for the RPS employers where they belong to 
substantial groups which we expect have a strong 
long-term outlook.
Rail signalling
Improved signalling systems also have a role to play in 
freeing up capacity on the network by safely allowing 
more trains on the network – with less distance 
between them. Improved signalling, control and traffic 
management systems can make more efficient use of 
the network and reduce energy consumption – e.g. 
making better use of available platforms and lines to 
reduce unnecessary train acceleration and wait times.
Whilst there may be uncertainty on the forecasts for 
future growth in passenger numbers, the rail freight 
sector is modelled to have substantial growth over 
the next 20 years. A limiting factor to this growth 
could be network capacity. In terms of the signalling 
sector, increased capacity and more efficient use of the 
network is required to deliver the growth in rail freight. 
This clear demand for increased capacity is a positive 
for the signalling companies. 
The Trustee will continue to engage with the RPS 
and BTPFSF sponsoring employers (including the 
employers not discussed in this report) to review their 
decarbonisation strategies and mitigation efforts to 
reduce potential climate change-related covenant 
impacts. We expect to report more on these activities 
and their impact in future TCFD reports.
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
England
3.7%
32.8%
Wales
Scotland
Non electrified
Electrified
43.8%
56.2%
96.3%
67.2%
Figure 5.2.4.3.2: Total and electrified route length (km) 
by country, Great Britain, as of March 2022

5.3 Climate risks to scheme liabilities
This section of the report describes: 
n The climate-related risks and opportunities relevant 
to the schemes over the time periods that the 
Trustee has identified 
n The potential impacts on the schemes’ liabilities 
which the Trustee has identified in those scenarios
In order to do that, we illustrate the impacts of the 
three climate scenarios (described in section 5.1) on 
the funding level of the DB sections of the RPS and the 
BTPFSF. Unless otherwise stated, the results disclosed 
below aggregate all DB sections of the RPS and the 
BTPFSF into two ‘total scheme25’ views. The analysis has 
been carried out by WTW (the RPS Scheme Actuary), 
with financial assumptions informed by asset-side 
analysis carried out by Ortec Finance (further described 
in section 5.4).
The analysis considers (i) the asset-side climate impact 
on investment returns, and (ii) liability-side impacts 
through potential changes to mortality assumptions 
in different climate scenarios. The analysis does not 
consider climate-induced inflationary impacts on 
liabilities because (a) liabilities have a relatively low 
degree of sensitivity to inflation and (b) the climate 
scenarios used assume relatively modest changes to 
future rates of inflation. The analysis does not adjust 
discount rates because doing so would risk double-
counting the asset-side loss or gain which is accounted 
for by (i) above.  
The results in figures 5.3.2.1, 5.3.2.2, and 5.3.3.1 and 
5.3.3.2 represent the cumulative impacts to assets and 
liabilities over the long term (defined per section 5.1 as 
40 years). 
Limitations to the analysis include:
n Those described in section 5.1
n The impacts on both assets and liabilities of climate 
scenarios are highly uncertain, and a number of 
subjective judgements are required in order to 
calculate the indicative impacts
n Other uncertainties related to mortality 
assumptions (outlined below)
5.3.1 Mortality assumptions
When projecting the expected benefit cash flows 
of DB sections, there are direct impacts of climate 
change on mortality to consider, along with indirect 
impacts on mortality that may result from behavioural 
and lifestyle changes. The mortality impacts of 
climate change scenarios are impossible to predict 
accurately and will depend on several climate and non-
climate related factors and the complex interactions 
between them. Non-climate related factors include 
the geographical composition of members, medical 
breakthroughs, lifestyle choices and the increased rates 
of diseases associated with these, reduced prosperity, 
and cuts to health services, e.g. due to the long-term 
consequences of COVID-19. 
When considering the potential impact of climate 
change on the mortality rates for the RPS and the 
BTPFSF, unlike the assets, the country of interest is 
almost exclusively the UK. The Met Office’s UK Climate 
Projections (UKCP18) provide estimates of probable 
UK climate outcomes for a range of global warming 
scenarios.
Under these projections, global warming is expected to 
lead to both warmer UK winters and summers. The
most obvious direct consequences are a reduction in 
cold-related winter deaths and an increase in heat-
related summer deaths. Translating climate-induced 
mortality changes in our three scenarios, WTW 
assumes the following:
n The Paris Orderly Transition leads to a high to very 
high improvement in longevity
n The Paris Disorderly Transition leads to a moderate 
improvement in longevity
n The Paris Failed Transition leads to a moderate 
deterioration in longevity
Figure 5.3.1.1: Projected changes to life expectancies 
in different climate scenarios for the DB Shared Cost 
sections of the RPS and the BTPFSF.  
page 43
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
A: Paris Orderly
 
Transition
B: Paris Disorderly
 
Transition
C: Paris Failed
     Transition
Current funding 
assumption
Life expectancy (years)
30
29
28
27
26
25
24
23
22
2022
2027
2032
2037
2042
2047
2052
Assumed life expectancy at age 60 by calendar year
Taskforce on Climate-related Financial Disclosure
25	 I.e. including DB arrangements, but excluding DC arrangements.
Climate risks
in the schemes

page 44
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
5.3.2 Climate scenario analysis of overall 
scheme liabilities and assets
The impact of life expectancy changes on scheme 
liabilities in the three climate scenarios is shown in 
figure 5.3.2.1. The data represents the cumulative 
climate impact on scheme liabilities over 40 years in 
each climate scenario, summed and discounted into 
a present value. The annualised impact on liabilities 
would be far smaller. The mortality of the RPS and 
BTPFSF membership (and hence the liabilities of 
the schemes) will change over a 40-year period for 
non-climate reasons. The numbers in figure 5.3.2.1 
represent the difference that climate change makes, 
given hypothetical scenarios, to the way in which 
liabilities would evolve for non-climate reasons. For 
example, if in 40 years’ time, the RPS’s liabilities turn 
out to be 5% greater for non-climate demographic 
reasons, WTW’s climate modelling suggests that a Paris 
Orderly scenario would increase this by a further 1.6% 
(this is the first number in figure 5.3.2.1).
Figure 5.3.2.1: Impacts of climate change on scheme 
liabilities in selected climate scenarios
The scenario analysis suggests that climate change 
has a low to moderate impact on the schemes’ 
liabilities over the long term. In a Failed Transition 
scenario, climate change is assumed to diminish 
liabilities and improve the funding level. Within the 
RPS, in this analysis the impacts to the liabilities of 
the 1994 Pensioners section are more muted than 
the Shared Cost sections owing to the members of 
the 1994 Pensioners section being older. Overall, the 
analysis suggests that from a liabilities perspective, 
climate impacts on mortality do not pose a significant 
challenge to the resilience of the schemes’ funding 
positions. 
For comparison, the modelled impacts on asset values 
over 40 years are shown in figure 5.3.2.2. The analysis 
uses the assumed changes to future expected returns 
provided by Ortec Finance (further described in section 
5.4) to apply a one-off shock to the assets under each 
scenario. The data in figure 5.3.2.2 represent the 
cumulative climate impact on asset values over 40 
years in each climate scenario, summed and discounted 
into a present value. The annualised impact on asset 
values would be far smaller. The value of the RPS and 
BTPFSF assets will change over the next 40 years for 
non-climate reasons. The numbers in figure 5.3.2.2 
represent the difference that climate change makes, 
given hypothetical scenarios, to the growth in asset 
value for non-climate reasons. For example, if the RPS’s 
total scheme asset value in 40 years’ time turns out to 
be 150% greater for non-climate reasons, WTW’s and 
Ortec Finance’s modelling suggests that a Paris Orderly 
scenario would decrease this by 5.9% (this is the first 
number in figure 5.3.2.2).
Figure 5.3.2.2: Impacts of climate change on assets in 
selected climate scenarios
In the climate scenarios analysed, the impacts to asset 
values are not significantly different between the 
Shared Cost sections and the 1994 Pensioners section 
of the RPS. It is noteworthy that climate impacts are 
always negative for asset values, regardless of climate 
scenario. This is explored in more detail in section 5.4. 
For the RPS Shared Cost Arrangement (the largest 
in the RPS), around 75% of the DB sections remain 
open, while 25% have closed. Over time, the closed 
sections might be expected to ‘de-risk’ and develop 
somewhat different investment strategies compared 
to open sections. For example, the closed Shared Cost 
sections might be expected to gradually invest in more 
defensive asset classes over time. WTW considered 
what would happen if we were to assume that, in 
20 years’ time, there had been a shift of 40% of 
closed section assets from the Growth Pooled Fund to 
defensive pooled funds. Based on the analysis provided 
by Ortec Finance and WTW, the negative impacts on 
asset values would reduce only modestly: by less than 
0.5% for the Paris Orderly scenario, around 1% for 
the Paris Disorderly scenario and around 1.5% for the 
Failed Transition scenario.
Scenario
Indicative change in value of the overall 
liabilities for the:
RPS 
(overall)
Shared 
Cost 
sections
1994 
Pensioners
BTPFSF
Paris 
Orderly
+1.6%
+1.7%
+0.7%
+1.2%
Paris 
Disorderly
-2.6%
-2.8%
-1.2%
-2.4%
Failed 
Transition
-5.4%
-5.8%
-2.4%
-4.8%
Scenario
Indicative change in value of the overall 
liabilities for the:
RPS 
(overall)
Shared 
Cost 
sections
1994 
Pensioners
BTPFSF
Paris 
Orderly
-5.9%
-5.9%
-5.3%
-5.8%
Paris 
Disorderly
-12.3%
-12.4%
-12.1%
-11.7%
Failed 
Transition
-19.1%
-19.1%
-18.5%
-18.1%
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes

5.3.3 Combined impact on scheme funding
Combining the impacts to investment returns and 
liabilities, the hypothetical funding levels for the RPS in 
the three climate scenarios are shown in figure 5.3.3.1, 
and for BTPFSF in figure 5.3.3.2. Similarly to figures 
5.3.2.1 and 5.3.2.2, the numbers in the table represent 
the difference climate makes over 40 years to the ways 
in which assets, liabilities, and funding levels change 
for non-climate reasons.  
Figure 5.3.3.1: RPS, combination of impacts to asset 
returns and scheme liabilities and resulting impacts to 
scheme funding level
Figure 5.3.3.2: BTPFSF, combination of impacts to 
asset returns and scheme liabilities and resulting 
impacts to scheme funding level
The scenario analysis suggests that a Failed Transition 
scenario is worst for the schemes’ funding levels, even 
accounting for reduced liabilities. From a pensions 
perspective as well as a societal perspective, scheme 
members appear to be better off in the long term in a 
scenario where the Paris Agreement on climate change 
is implemented. 
The analysis suggests that asset impacts are likely 
to be greater than impacts to scheme liabilities. This 
finding is consistent with the prioritisation of the 
Trustee’s climate governance activities to date, which 
have focused on the investment portfolio over scheme 
liabilities. 
WTW (the RPS Scheme Actuary) believes climate 
change represents a demographic risk that should 
be managed by pension schemes and their sponsors. 
The Trustee’s Integrated Funding Committee, which 
agrees integrated funding plans for each scheme and/
or section, has not to date included the outputs of 
the quantitative scenario analysis in specific integrated 
funding plans, though this is subject to review based 
on advice from Railpen and the Scheme Actuary (the 
Scheme Actuary for BTPFSF is XPS Pensions Group).   
 
page 45
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Scenario
Indicative change in value of the RPS:
Assets
Liabilities
Funding  
level
Paris 
Orderly
-5.9%
+1.6%
-7.3%
Paris 
Disorderly
-12.3%
-2.6%
-10.0%
Failed 
Transition
-19.1%
-5.4%
-14.4%
Scenario
Indicative change in value of the BTPFSF:
Assets
Liabilities
Funding  
level
Paris 
Orderly
-5.8%
+1.2%
-6.9%
Paris 
Disorderly
-11.7%
-2.4%
-9.5%
Failed 
Transition
-18.1%
-4.8%
-13.9%
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes

page 46
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Taskforce on Climate-related Financial Disclosure
5.4 Climate risks to investment returns
5.4.1 Scenario analysis and investment 
strategy 
This part of the report describes: 
n The climate-related risks and opportunities relevant 
to the schemes over the time periods that the 
Trustee has identified 
n The potential impacts on the schemes’ assets 
which the Trustee has identified in its selected 
climate scenarios 
n The resilience of the schemes’ investment 
strategies
From an investment perspective, the Trustee uses a 
pooled-fund lens when reviewing the results of climate 
scenario analysis. The sections within the schemes, 
including DB and DC arrangements, invest in a discrete 
set of pooled funds permitted by the Statement of 
Investment Offering which is approved by the Trustee. 
Each section allocates assets to pooled funds as 
required to meet its own investment strategy. 
Adopting a pooled-fund lens, rather than a section-by-
section lens, has the following advantages:
n Simpler to produce, understand, and communicate
n Less costly in terms of fees paid to third parties
n Reduced complexity in determining risk
        management activities and ongoing monitoring
Ortec Finance generates scenario analysis at the 
asset-class level, and these are then translated to 
the pooled-fund level based on individual asset class 
allocation within each pooled fund (see section 
5.4.1.1). The scheme-level climate impacts are then 
determined based on the pooled fund allocations 
across the RPS and the BTPFSF.
In order to model impacts on investment returns 
in different climate scenarios, Railpen’s investment 
portfolio as of 31 December 2021 was mapped to 
chosen proxy benchmarks (for common asset classes 
and regions) in Ortec Finance’s climate scenario 
analysis (MAPS) model. While Ortec Finance is a well-
established specialist in climate scenario analysis, it is 
possible that the proxies used in a model are imperfect 
representations of the RPS or BTPFSF investment 
portfolio. This might affect the validity of analysis for 
unlisted asset classes like private equity, infrastructure, 
and property, which might be proxied using publicly 
listed benchmarks such as a listed equity index.
For the purposes of this analysis, Ortec Finance 
assumed no changes to the RPS or BTPFSF allocations 
to asset classes, sectors and geographies over time. 
Although this is a necessary assumption to make, it is 
unlikely that asset allocation will remain constant for 
decades to come. 
5.4.1.1 Supplementary data on asset 
allocation26 
The overall asset allocations of the RPS and the BTPFSF 
reflect the fact that the majority of the assets are 
within non-maturing sections. Their long investment 
horizons and ability to tolerate relatively high levels 
of investment risk leads to asset allocations with 
significant public and private equity exposures, 
followed by real assets and bond exposures. These 
assets are invested globally. 
The Growth Pooled Fund is the largest pooled fund in 
the schemes’ portfolios and is a multi-asset fund with 
exposures (as at year end 2021) across public equities 
67%, real estate 10%, credit 7%, total return 5%, and 
other 11%. The Illiquid Growth Pooled Fund is invested 
in private markets investments, primarily in private 
equity and private debt.
26	 As at year end 2021, unless otherwise stated. We provide 
2021 data as these were the data used for the scenario 
analysis whose results are reported in this TCFD report. 
Climate risks
in the schemes

page 47
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Figure 5.4.1.1.1: RPS asset values as at 31 December 
2021
Figure 5.4.1.1.2: RPS asset allocation by asset class, 
31 December 2021
Figure 5.4.1.1.3: RPS asset allocation by geography, 
31 December 2021
Figure 5.4.1.1.4: RPS asset allocation by pooled fund, 
31 December 2021 
Cash
Government Bonds
Public Equity
Private Equity
Private Debt
Property
Infrastructure
Secure Income
Corporate Credit
Sovereign Credit
Royalties
Insurance
7.4%
7.3%
50.8%
10.7%
3.9%
6.3%
1.4%
3.3%
2.3%
3.4%
0.6%
2.6%
Canada
Dev Asia Ex Japan
Emerging Markets
Europe
GCC
Japan
UK
US
0.4%
2.2%
13.0%
11.8%
0.3%
3.4%
30.0%
38.9%
Growth Pooled Fund
Passive Equity Pooled Fund
Private Equity Pooled Fund
Global Equity Pooled Fund
Long Duration Index-linked 
Bond Fund
Government Bond Pooled 
Fund
68%
3%
8%
2%
1%
4%
0%
1%
0%
7%
4%
2%
Infrastructure Pooled Fund
Non Government Bond 
Pooled Fund
Cash Pooled Fund
Illiquid Growth Pooled Fund
Long-Term Income Pooled 
Fund
Short Duration Index-linked 
Bond Fund
AUM £m
Defined Benefit pooled funds
Growth
22,731
Private Equity
2,557
Illiquid Growth
2,442
Government Bond
1,429
Passive Equity
1,075
Long-Term Income
1,181
Short Duration Index-linked Bond
809
Global Equity
660
Non-government Bond
375
Infrastructure
123
Long Duration Index-linked Bond
195
Cash
66
33,643
Defined Contribution 
Arrangements and other assets
BRASS and other AVCs 
1,851
Substitution orders
830
Annuities
45
Cash and other assets
110
36,479
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes

page 48
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Figure 5.4.1.1.5: BTPFSF asset allocation by asset class, 
31 December 2021
Figure 5.4.1.1.6: BTPFSF asset allocation by geography, 
31 December 2021
Figure 5.4.1.1.7: BTPFSF asset allocation by pooled 
fund, 31 December 2021
Cash
Government Bonds
Public Equity
Private Equity
Property
Infrastructure
Secure Income
Corporate Credit
Sovereign Credit
Royalties
Insurance
7.4%
8.3%
45.1%
16.5%
6.7%
0.2%
8.2%
1.2%
3.3%
0.5%
2.5%
Canada
Dev Asia Ex Japan
Emerging Markets
Europe
GCC
Japan
UK
US
0.3%
1.9%
12.5%
10.9%
0.3%
3.0%
34.7%
36.3%
Growth Pooled Fund
Private Equity Pooled 
Fund
Long Duration Index- 
linked Bond Fund
Government Bond 
Pooled Fund
Infrastructure Pooled 
Fund
66.4%
6.4%
 
0.3%
 
3.6%
 
0.2%
0.1%
10.1%                               
 
8.2%
 
4.4%
Cash Pooled Fund
Illiquid Growth Pooled 
Fund
Long-Term Income Pooled 
Fund
Short Duration Index- 
linked Bond Fund
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes

page 49
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
5.4.2 Climate scenario analysis in DB pooled 
funds and resilience of the investment 
strategy
Impacts on investment returns at a ‘scheme-wide’ level 
are discussed in section 5.3.2. This section dives deeper 
into the drivers of these results. 
Figure 5.4.2.1 displays the climate scenario analysis 
results at a pooled fund level27. 
The data in the table represent the difference in 
annualised real returns, for some given scenario and 
time horizon, that climate impacts have on a climate-
unadjusted baseline. For example, if your expectation 
of the Growth Pooled Fund is that its annualised real 
return over the next years will be 10%, the climate 
scenario analysis results in figure 5.4.2.1 suggest this 
return should be adjusted by -0.4% in a Paris Orderly 
climate scenario over years 1-10 (see the first column, 
first row under ‘Paris Orderly’ in the table). 
Figure 5.4.2.1: Modelled impacts on future investment returns in the three selected climate scenarios
* In order to protect the intellectual property of Ortec Finance, we do not display the actual modelled impacts for these pooled funds, but instead use the return 
impacts for the Growth Pooled Fund as a proxy for the impacts in the Passive Equity Fund and Global Equity Pooled Fund, and we use the return impacts to the 
Long Duration Index-linked Pooled Fund as a proxy for the impacts in the Short Duration Index-linked Fund. The actual treatment of these pooled funds in the 
model differs from the proxied values displayed in this public report.
27	 The climate scenario analysis is conducted at the underlying investment asset class level 
first and the results are then translated to the pooled fund level based on the pooled funds’ 
allocations to the individual asset classes.
Paris Orderly
Paris Disrderly
Failed Transition
Pooled Fund
Years
1-10
Years
1-20
Years
1-40
Years
1-10
Years
1-20
Years
1-40
Years
1-10
Years
1-20
Years
1-40
Growth
-0.4%
-0.3%
-0.2%
-1.4%
-0.8%
-0.5%
-0.4%
-1.6%
-1.1%
Long Duration Index-linked Bond
0.0%
-0.1%
-0.1%
0.0%
0.0%
-0.1%
0.0%
0.0%
-0.1%
Illiquid Growth
-0.6%
-0.3%
-0.3%
-0.7%
-0.4%
-0.4%
-0.4%
-1.4%
-0.9%
Long-Term Income
-0.1%
-0.1%
-0.1%
-0.3%
-0.2%
-0.2%
-0.2%
-0.6%
-0.4%
Private Equity
-1.2%
-0.7%
-0.6%
-1.9%
-1.1%
-0.8%
-0.8%
-3.3%
-2.2%
Government Bond
0.0%
0.0%
-0.1%
0.0%
0.0%
-0.1%
0.0%
0.0%
-0.1%
Non-government Bond
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
-0.1%
-0.1%
Infrastructure
-0.3%
-0.3%
-0.4%
-1.1%
-0.7%
-0.6%
-0.5%
-1.8%
-1.4%
Passive Equity Pooled Fund*
-0.4%
-0.3%
-0.2%
-1.4%
-0.8%
-0.5%
-0.4%
-1.6%
-1.1%
Global Equity Pooled Fund*
-0.4%
-0.3%
-0.2%
-1.4%
-0.8%
-0.5%
-0.4%
-1.6%
-1.1%
Short Duration Index-linked Fund*
0.0%
-0.1%
-0.1%
0.0%
0.0%
-0.1%
0.0%
0.0%
-0.1%
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes

page 50
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
The climate scenario analysis on the investment 
portfolio suggests the following conclusions in respect 
of the resilience of the scheme-wide investment 
strategy:
n Expected returns are affected negatively versus 
baseline across all pooled funds and in every 
time horizon over the next 40 years. The failed 
transition has the most negative impacts, 
suggesting that long-term investors have an 
economic incentive to support a Paris-aligned 
transition. 
n The greatest climate-related risks relevant to the 
schemes over the time periods that the Trustee has 
identified are: 
–	
Physical climate risk in scenarios, particularly 
when the transition to a greener economy 
fails. The regions most affected by the 
financial impacts of physical climate risk are 
Asia (South Asia, East Asia, South-East Asia), 
North America, and Australasia. In terms of 
sectors, consumer discretionary, industrials, 
and consumer staples are the most affected 
by physical risk in the climate modelling 
used in this analysis. Ortec Finance’s analysis 
suggests the RPS and BTPFSF should be more 
concerned about potential physical risks than 
potential transition risks.
–	
Transition climate risk when global climate 
policy is uncoordinated and market reactions 
are more sudden. Regions like North America, 
Australasia, and China, are most vulnerable 
to the risk of a disorderly transition. The RPS 
and the BTPFSF have significant exposure to 
the US, in particular to US equities. The US 
economy, given its position as a net fossil 
fuel exporter, with low energy efficiency, 
low carbon pricing and high sensitivity to 
market sentiment shocks make it exposed 
to transition risks and this is reflected in the 
scenario analysis results. 
–	
In terms of strategic asset allocation, growth 
assets (notably listed equities and private 
equity) are modelled to be less resilient across 
climate scenarios than defensive assets (such 
as fixed income). However, growth assets are 
expected to deliver a higher rate of return 
than defensive assets, even accounting 
for climate-related impacts in the different 
scenarios. This suggests that growth investors 
ought to continue to monitor portfolio risks 
and take risk reduction actions (including 
investment stewardship) where beneficial to 
risk-adjusted investment outcomes. According 
to the analysis, maintaining a diversified 
portfolio helps to soften the magnitude of 
climate risks in different scenarios. Investors 
should consider the merits of incorporating 
climate impacts on investment returns in 
asset-liability modelling.
–	
On sector allocations, as might be expected, 
oil and gas, fossil fuel utilities, road, air 
and sea transportation, and consumer 
discretionary sectors, are impacted the most 
across all three climate scenarios. At the time 
of analysis, the RPS and the BTPFSF had very 
low exposure to oil & gas (suggesting the 
investment strategy might exhibit resilience 
to Paris-aligned scenarios), but a significant 
allocation to consumer discretionary (which 
could undermine investment strategy 
resilience in the longer term in a Failed 
Transition scenario). As a result, the RPS and 
BTPFSF investments in private equity (which 
are exposed to the consumer discretionary and 
industrial manufacturing sectors) are modelled 
as having the greatest impacts to returns 
(driven primarily by physical risks), followed 
by public equities. Given the dispersion of 
climate-related return impacts across sectors 
and regions, investors and investment risk 
professionals ought to monitor sector and 
region exposure.
n The greatest climate-related opportunities relevant 
to the schemes over the time periods that the 
Trustee has identified are: 
–	
Regions such as Europe and the UK that could 
prove to be ‘winners’ in scenarios where the 
Paris Agreement is achieved 
–	
Stewarding high-emitting companies in which 
the RPS or BTPFSF have significant investments 
could enable these companies to realise the 
opportunities that come with aligning their 
business models to a lower risk pathway, and 
could thereby reduce risk at scheme-level (see 
section 6.4 for more information)
n The timing of risk realisation is scenario dependent. 
Scenarios that align with the Paris Agreement 
experience greater impacts in the short term, but 
the Failed Transition scenario has greater impacts 
in the medium and long term. This suggests 
investors should monitor the global policy response 
to climate change to attempt to understand which 
scenario has the greatest likelihood of playing 
out, and whether action is required in the short 
or longer term. Investors should also review their 
selection of scenarios as a scenario not considered 
in their analysis might unfold.
Ultimately, climate scenario analysis is useful for 
modelling a direction of travel, rather than pin-pointing 
accuracy. The most interesting findings lie, not in the 
average performance for portfolios or asset classes, but 
rather in identifying the outliers (such as certain sectors 
or certain positions), which improves the efficiency of 
ongoing risk management. 
As a result of climate scenario analysis and other 
analysis conducted from time to time, the Trustee (or 
Railpen acting on the Trustee’s behalf) intends to:
n Continue to analyse, monitor, manage the highest 
emitting portfolio companies for transition and 
physical risks, building on work done to date
n Conduct further analysis of physical risks, and 
review potential enhancements to analytical 
capabilities
n Consider the merits of incorporating climate 
impacts on investment returns in asset-liability 
modelling
n Continue to identify climate-related investment 
opportunities
n Review the selection of climate scenarios as 
appropriate 
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes

page 51
5.4.3 Climate scenario analysis in DC pooled 
funds
RPTCL is responsible for three DC arrangements; 
BRASS, AVC Extra and the IWDC section.
n	
BRASS, the main Additional Voluntary 
Contributions (AVC) arrangement, is open to all 
contributing members of the DB sections of the 
RPS. Within the BTPFSF, however, BRASS is open 
only to members of the 1970 sections
n	
AVC Extra is the second contribution top-up 
arrangement for contributing members of the DB 
Sections (other than the Network Rail Section) of 
the RPS. Within the BTPFSF, AVC Extra is open to 
2007 and CARE members, and to 1970 members 
who want to pay AVCs above their BRASS limit.
	
–	 At 31 December 2021, AUM in the BRASS and 
	
AVC Extra arrangements was approximately 
	
£2bn for the RPS and £8.5m for the BTPFSF
n	
The IWDC Section is the authorised DC master 
trust of the RPS for rail industry employees and, 
other than AVCs, it is the only section in the RPS 
which provides money purchase benefits.
	
–	 AUM in the IWDC section of the RPS was 
	
approximately £228m at 31 December 2021
Climate governance, strategy, and risk management 
within DC arrangements are described in sections 4 
and 5 of this report.
In assessing, monitoring, and managing climate-related 
risks in the DC pooled funds we are primarily interested 
in physical and transition risks to asset returns. The 
purpose of this section of the report is to describe the 
climate scenario analysis impact on investment returns 
in the DC arrangements. The same service providers 
(Ortec Finance and WTW) are used to produce climate 
scenario analysis results. The same scenarios and 
time horizons are selected. The same methodological 
limitations described above apply to the climate 
scenario analysis for the DC arrangements.   
A consistent DC pooled fund range is used by BRASS, 
AVC Extra and the IWDC section of the RPS. These 
pooled funds are also used as the building blocks of 
the various default and alternative lifestyle strategies. 
On a look-through basis, the allocations to each 
of the DC pooled funds as of 31 December 2021 
is shown in figure 5.4.3.1 for the RPS and figure 
5.4.3.2 for the BTPFSF.
28,29  For the purposes of conducting climate scenario analysis, 
the DC pooled funds are modelled using a mapping to DB 
pooled funds that share suitably similar asset classes and 
risk characteristics. The DC Deposit Fund is not mapped 
as it primarily invests in money market funds and UK 
government treasury bills which exhibit close to zero 
climate risk in commonly used climate scenario analysis 
models. 
DC pooled fund allocations
BRASS
AVC Extra
IWDC
Total 
RPS DC
Mapping28
DC Long-Term Growth Fund
62%
17%
45%
59%
Growth Pooled Fund
DC Global Equity Fund
14%
48%
38%
17%
Growth Pooled Fund
DC Index-linked & Global Bond 
Fund
1%
3%
1%
1%
Long Duration Inflation-linked 
Bond Fund
DC Aggregate Bond Fund
1%
22%
12%
2%
n/a
DC Deposit Fund
23%
11%
3%
20%
n/a
Figure 5.4.3.1: DC section allocations to pooled funds (RPS) as of 31 December 2021
Figure 5.4.3.2: DC section allocations to pooled funds (BTPFSF) as of 31 December 2021
Taskforce on Climate-related Financial Disclosure
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
DC Pooled Fund Allocations
BRASS
AVC Extra
Total BTPFSF DC
Mapping29
DC Long-Term Growth Fund
38.7%
2.9%
41.6%
Growth Pooled Fund
DC Global Equity Fund
14.3%
15.2%
29.5%
Growth Pooled Fund
DC Index-linked & Global Bond Fund
1.9%
1.6%
3.3%
Long Duration Inflation-linked 
Bond Fund
DC Aggregate Bond Fund
5.4%
0.6%
6.0%
n/a
DC Deposit Fund
16.5%
3.2%
19.6%
n/a
Climate risks
in the schemes

page 52
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Figures 5.4.3.3 and 5.4.3.4 show respectively the 
modelled impacts of climate risk on the RPS and 
BTPFSF DC arrangements for the three selected 
climate scenarios. The data in the tables represent the 
difference in annualised real returns, for some given 
scenario and time horizon, that climate impacts have 
on a climate-unadjusted baseline. For example, if your 
expectations of the overall DC arrangement are that 
its annualised real return over the next 20 years will 
be 10%, the climate scenario analysis results in figure 
5.4.3.3 suggest this return should be adjusted by 
-0.24% in a Paris Orderly climate scenario over years 
1-20 (see figures 5.4.3.3, first column, first row).
Given the similarities in investment strategy between 
the DC pooled funds and the DB pooled funds, the 
same findings as laid out in section 5.4.2 apply here. 
In addition, the activities taken to manage the risks 
identified in climate scenario analysis of DC pooled 
funds are the same as those laid out in section 5.4.4 
and elsewhere. Rather than duplicate the content, 
we refer readers to the content on the previous and 
following pages.
Figure 5.4.3.3: Impacts of climate change on DC assets (RPS) in selected climate scenarios
Figure 5.4.3.4: Impacts of climate change on DC assets (BTPFSF) in selected climate scenarios
Scenario
Indicative change in value of the overall assets for the:
DC (overall)
BRASS
AVC Extra
IWDC
Years
1-20
Years
1-40
Years
1-20
Years
1-40
Years
1-20
Years
1-40
Years
1-20
Years
1-40
Paris Orderly
-0.24%
-0.17%
-0.21%
-0.15%
0.00%
0.00%
-0.03%
-0.02%
Paris Disorderly
-0.60%
-0.37%
-0.53%
-0.33%
-0.01%
0.00%
-0.07%
-0.04%
Failed Transition
-1.21%
-0.86%
-1.06%
-0.75%
-0.01%
-0.01%
-0.14%
-0.10%
Scenario
Indicative change in value of the overall assets for the:
DC (overall)
BRASS
AVC Extra
Years
1-20
Years
1-40
Years
1-20
Years
1-40
Years
1-20
Years
1-40
Paris Orderly
-0.22%
-0.16%
-0.17%
-0.12%
-0.06%
-0.04%
Paris Disorderly
-0.56%
-0.35%
-0.542%
-0.26%
-0.14%
-0.09%
Failed Transition
-1.13%
-0.81%
-0.84%
-0.60%
-0.29%
-0.21%
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes

page 53
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
5.4.4 Climate risk integration
This section of the report describes how climate risks 
are identified and assessed within the investment 
process, and describes the risk tools the Trustee 
uses, and the outputs and outcomes of using those 
particular tools.
Transition and physical risks are identified and assessed 
using quantitative and qualitative approaches. Once 
risks have been identified and assessed, their
management is achieved through a variety of activities,
the nature of which (typically risks are avoided, 
mitigated, or exploited) depends on the context. 
Although the focus of this report is on the 
management of scheme-wide climate risks, the Trustee 
believes that a bottom-up perspective is important for 
the purposes of analysing and managing physical and 
transition risks in an investment decision 
making-context. 
As explained in section 4, day-to-day operation of 
the schemes is delegated to Railpen, with regular 
reporting to, and oversight by, the Trustee. Railpen’s 
approach to climate risk integration is documented in 
the ESG Risk Directive, which is part of the Investment 
Risk Governance Framework. Railpen’s Net Zero Plan 
goes beyond the Directive and sets goals for the 
investment portfolio to align with net zero by 2050 
or sooner. Figure 5.4.4.1 provides an overview of 
climate risk integration at the schemes, with a focus 
on the Investment pillar; explanations are provided 
in the subsections that follow.
Figure 5.4.4.1: Schematic depicting CRIANZA and scenario analysis for climate risk integration in the investment portfolio
Tools and analysis
 Top-down and
 
bottom-up
 Qualitative
 Quantitative
TOP DOWN
BOTTOM UP
Risk management
 Tailored
 
approaches
Avoid
 Climate exclusions
 
policy
 Due diligence and
 
asset selection
Exploit
Mitigate
 Investing in climate
 
opportunities
 Climate stewardship: Net Zero Engagement Plan
 External manager agreements
   Property tenant engagement
Investment
Quantitative climate scenario analysis
Short, medium, long term
Use cases of CRIANZA
 Analyse portfolio companies
 Analyse sponsoring employers
 Estimate portfolio alignment
CRIANZA tool
 Proprietary climate
 
risk and net-zero
 
alignment tool
CRIANZA outputs
 Climate risk score
 
(1 lowest risk, 5 highest risk)
 Climate risk classification
 
(risk, enabler and opportunity)
 Net-zero alignment status
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes

5.4.4.1 Climate risk management in the 
investment process
Risk identification and assessment are powered by 
quantitative scenario analysis (explained in section 
5.4.4), qualitative analysis (for example, in assessing 
the way climate risks could threaten employer covenant 
strength), and the use of Railpen’s proprietary CRIANZA 
framework and tool, which we explain in section 
5.4.4.2. The rest of this subsection describes climate 
risk management in the investment process.
Climate change presents various types of investment 
risks that could present challenges and opportunities 
for the investment portfolio in a number of ways. 
Depending on the type of risk, we typically take actions 
to avoid, mitigate, or exploit the risk:
n	
Avoid the risk – for example, we have reduced 
the schemes’ exposure to stranded asset risk by 
excluding companies with substantial exposure to 
thermal coal and tar sands.  
n	
Mitigate the risk – either mitigating climate risk as 
a systemic risk, or as an idiosyncratic (or individual 
asset-specific) risk. Mitigating climate risk as a 
systemic risk includes taking measures to align the 
investment portfolio to net zero by 2050 or sooner, 
engage policy makers to encourage measures 
that support a 1.5°C temperature outcome, and 
collaborate with peer investors to help drive 
down GHG emissions in the real economy. These 
measures could mitigate the level of systemic 
risk by reducing the likelihood of a harmful 
temperature outcome. Mitigating climate risk as 
an idiosyncratic risk involves analysing potential 
investments for climate risk, monitoring, and 
engaging companies to encourage them to adopt 
business plans that manage against physical and 
transition climate risks, and setting agreements for 
external managers to mitigate climate risk when 
managing money on the Trustee’s behalf. These 
measures could mitigate the level of idiosyncratic 
risk by ensuring companies in our portfolio are 
more robust to the risks posed by climate change. 
n	
Exploit the risk – for example by investing in 
climate opportunities, as described in section 
5.4.5.
As described in section 4, the ESG Risk Directive 
(where ESG includes climate risks) makes specifications 
across asset classes regarding how ESG risks must 
be measured and managed. The Directive notes 
that different asset classes vary in respect of (i) the 
nature and materiality of climate and ESG risk and 
(ii) the availability of ESG risk information. Climate 
risk in particular, varies by asset class, sector, business 
model, and geography of the underlying holdings. As 
a result, the approaches for identifying and assessing 
ESG (and climate risk) vary across asset classes (and 
in some cases, across sectors, business models, and 
geographies). The selection of approach is driven 
by factors including expected climate impact on 
returns of the asset class, vulnerability to physical 
and transition risk, availability and quality of data, 
specific stewardship and engagement mechanisms 
that are available, and potential pathways to net-zero 
alignment. Figure 5.4.4.1.1, which is adapted from 
a table in the Risk Directive, shows the climate risk 
management techniques used across different asset 
classes.
Idiosyncratic ESG risk is managed by a wide range of 
actions, including climate-related and other portfolio 
exclusions, ESG risk analysis, securing ownership 
rights, negotiating contracts and terms, engagement, 
monitoring, improving asset quality, and supporting 
value at exit. Systematic ESG risk is managed primarily 
by engagement (with policymakers, peer investors, and 
portfolio companies) and shareholder voting. 
page 54
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes

page 55
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Pooled Fund
Portfolio(s)
Pre-investment
Asset management
Divestment / exit
Growth Fund
Quantitative equities
a
e, f, g, h, j 
 
Fundamental equities
a, b
e, f, g, h, j
l
External managers
a, c, d
e, j
 
Property
b, d
j
l
Illiquid Growth Fund
Co-investments (private equity, 
private debt, venture)
a, b, d
e, f, g, i, j
l
External managers
c, d
j
 
Long-Term Income 
Fund
Directs
a, b, d
e, f, g, i, j
l
External managers
c, d
j
 
Equity funds
External managers (global equity; 
passive equity)
a, c, d
e, g, h, j
DC funds
Global equity
As per Equity pooled funds above
Long-term growth
As per Growth Pooled Fund above
Figure 5.4.4.1.1: Techniques used to identify and assess climate risks in the investment portfolio30 
Avoid
Mitigate
Exploit
a
Climate risk exclusions
d
Legals & contracts
j
Value creation plan
b
Climate and ESG analysis / 
due diligence
e
Ownership rights 
l
Value at exit
c
External manager due diligence
f
Dialogue
g
Escalation
h
Collaboration
i
Monitoring and re-measuring 
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes
30	 Note: not every technique is applied for every investment transaction; rather, the techniques 
most appropriate for the investment in question are identified and executed accordingly.

page 56
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
CRIANZA produces two types of score for each 
company. First, a risk score (companies are scored 
between 1 and 5, and given a classification as 
a ‘climate risk’, ‘climate enabler’, or ‘climate 
opportunity’), and second, a net-zero alignment 
status (companies are assessed as being ‘not aligned’, 
‘committed to aligning’, ‘aligning’, or ‘fully aligned’). 
For the risk scores, a combination of third-party data 
and proprietary methodology are used within the 
CRIANZA Framework and Tool. The assessments are 
updated after learning more about a company during 
company engagement. 
For the alignment scores, the tool uses a milestone-
based approach to assess and score a company’s 
alignment with a net-zero pathway. This means that 
companies are expected to do more – i.e. they are 
expected to reach additional alignment milestones 
– each year following the baseline assessment. 
This approach is consistent with the Institutional 
Investor Group on Climate Change (IIGCC) Net Zero 
Stewardship Toolkit, which Railpen co-authored. The 
assessment framework also draws on the Climate 
Action 100+ Benchmark and the Transition Pathway 
Initiative (TPI) scoring, with additional proprietary 
inputs from Railpen. 
The objective of the portfolio alignment assessment is 
to enable a feedback loop between company analysis 
and company engagement, i.e. the insights from 
the analysis feeds into climate stewardship, which 
ultimately should improve company alignment over 
time. The Trustee has adopted a target to increase the 
proportion of portfolio companies rated as ‘aligning’ 
and ‘fully aligned’ (see section 6).
From an investment perspective, the priority focus to 
date has been on public markets portfolios because 
(i) this is the largest allocation across the schemes, (ii) 
climate data is of greater quality and completeness, 
and (iii) quantitative scenario analysis suggests public 
equities is one of the asset classes most likely to face 
the higher climate-related impact on returns. As set 
out in figure 5.4.4.1.1, climate-related exclusions 
(companies with significant revenues from thermal 
coal and tar sands) are applied where practicable to 
quantitative equities, fundamental equities, external 
managers, equity pooled funds and DC pooled funds. 
Each fundamental equity investment requires that ESG 
risk (including climate risk) analysis, and large emitters 
in public markets portfolios, have been additionally 
analysed using a climate risk assessment framework 
and tool. We provide detail on risk management in 
public markets portfolios in section 6.4. We comment 
briefly below on activities undertaken within private 
markets and real assets. 
5.4.4.2 CRIANZA Framework and Tool
CRIANZA (Climate RIsk And Net Zero Alignment) is a 
proprietary framework and tool developed by Railpen 
to assess and score the extent of climate risk and net-
zero alignment at individual companies. During 2023, 
CRIANZA was used to assess companies within the 
scope of Railpen’s Net Zero Plan (which covers c.70% 
of financed emissions in material sectors in public 
markets). The framework incorporates sector-specific 
features for alignment assessment and can be used for 
risk management, regulatory reporting, and for climate 
stewardship activities (for example, by identifying gaps 
in a company’s current practice, which forms a basis 
for discussion with a company and can suggest how to 
direct votes at the company AGM).
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes
Figure 5.4.4.2.1: Overview of the CRIANZA assessment methodology
Net-zero
alignment assessment
Climate and net-zero
stewardship and
engagement
Policy
Governance
Data, systems and performance
Accounting and audit
Risk management
Startegy and capital allocation
The just transition considerations
Lobbying and collaboration
Climate risk
scorecard assessment
Current impact of
physical changes
Current low carbon business
transition profile
Technology, policy and
 market risks
Company adaptation
Long-term exposure to
low carbon transition
1 – low / 5 – high risk
Climate risk score
Committed
Fully aligned
Not aligned
Aligning
Climate
risk
Climate
enabler
Climate
opportunity
Climate type classification of investment
Likelihood,
materiality,
valuation 
Impact

page 57
5.4.4.3 Climate risk integration in private 
markets and real assets
Private markets represented c.15% of scheme assets at 
December 2023. Private markets investors are beset by 
a lower level of climate-related information compared 
to public markets. In addition, private markets have 
been a little slower to develop net-zero methodologies. 
Railpen has sought to work with industry peers to 
develop a private markets methodology for net zero 
and, to that end, Railpen has contributed to the Paris 
Aligned Investing Initiative’s Private Equity Working 
Group, whose new methodology was published in May 
2023. 
Our investments in real assets consist mainly of 
property and infrastructure assets located in the 
UK. The portfolio is therefore impacted by trends in 
UK climate data. The UK climate data indicate that 
there has been, and will continue to be, a shift to a 
hotter and more unstable climate. The most recent 
assessment from the UK government and the Climate 
Change Committee (CCC) provides strong evidence 
that even under low warming scenarios, the UK will 
be subject to a range of significant and costly impacts 
unless significant further policy action is taken in the 
near term. 
Real assets can be vulnerable to physical climate 
risks. These risks can be event-driven and acute, like 
heatwaves, bushfires or floods, or longer-term shifts, 
such as rising sea levels. Financial implications include 
direct damage to assets, business disruption and 
indirect impacts from supply chain disruption. Real 
assets can also be vulnerable to transition climate 
risks, for example, if increasingly stringent climate 
policy measures affect an asset’s ability to generate 
income or requires unanticipated capital expenditure. 
Railpen, acting for the Trustee, takes a number of risk 
management activities to reduce, mitigate, or exploit 
physical and transition risks within real assets investing. 
Figure 5.4.4.3.1 outlines some of these activities in the 
property portfolio (c.£2bn scheme assets at December 
2023).
Taskforce on Climate-related Financial Disclosure
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Climate risks
in the schemes

page 58
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes
5.4.4.4 External managers and climate risk 
integration 
Scheme assets are managed by a mixture of internal 
and external investment managers, although we 
have significantly reduced the number of external 
managers over the last few years. Railpen oversees the 
selection, appointment, and monitoring of external 
fund managers. Prior to appointment, an assessment 
of the external manager’s approach to climate risk 
is conducted using Railpen’s Manager Assessment 
Framework (MAF). External managers are expected 
to align with the schemes’ climate exclusion lists, to 
factor climate risk into investment decision-making, 
and report to Railpen on portfolio climate risks. 
Additionally, if the external manager is managing 
assets within scope of the Net Zero Plan, the manager 
is asked to report on the portfolio’s alignment to net 
zero31. These expectations are set out in Investment 
Management Agreements (IMAs), with the Trustee’s 
Statement of Investment Principles (SIP) being 
appended to all IMAs. 
The output of the MAF is an ESG risk score (ESG risk 
includes climate risk). To produce the score, Railpen 
sends a due diligence questionnaire to the external 
manager. Following review of the questionnaire 
response and additional analytics, a meeting is 
arranged to close information gaps and explore areas 
of concern. Railpen’s External Manager team and 
Sustainable Ownership team members then assign an 
ESG score, using the assessment criteria in the MAF. A 
list of actions for follow-up and review is also created. 
Issues identified in the MAF process might lead to 
particular clauses in the IMA or side letter. Although 
many of our external managers score well in the MAF, 
we have noted some areas for improvement in the 
climate stewardship processes and objective-setting of 
some managers. We are in regular contact with those 
managers to close the remaining gaps.
Figure 5.4.4.3.1: Climate risk management activities in the property portfolio
Baseline data
Tenant engagement
Target setting
Investment and
asset management
 Use of Carbon
 
Intelligence’s EVORA
 
platform
 Green leases
 Energy efficiency
 
refurbishment
 100% electricity from
 
renewable resources
 Occupier fit-out guides
 BREEAM ‘Outstanding’
 
rating for new builds
 Energy reduction target
31	 Relevant external managers are signatories to the Net Zero 
Asset Managers (NZAM) initiative.

page 59
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
5.4.5 Climate opportunities
This section discloses information about how climate-
related opportunities are identified, assessed and 
managed.
Climate change is likely to present new investment 
opportunities. These can include technologies that 
address climate mitigation (such as clean energy, 
energy efficiency, natural carbon stores), and climate 
adaptation (improved infrastructure resilience, and 
health, wellbeing and productivity solutions). The UK 
government’s independent 2022 Climate Change 
Risk Assessment concluded that early adaptation 
investments deliver high value for money with 
benefit-cost ratios typically from 2:1 to 10:1 (i.e. every 
£1 invested in adaptation could result in £2 to £10 in 
net economic benefits32,33). A 2022 government policy 
paper on British energy security strategy aims for 95% 
of UK electricity to be from low-carbon sources by 
2030, and has relaxed some aspects of planning for 
renewable energy deployment34. In identifying climate 
transition investment opportunities, investors need to 
attend to valuations to prevent investing beneficiaries’ 
capital in a ‘green bubble’. 
Railpen’s investment teams have been sourcing and 
investing in the climate transition for several years. 
Investment ideas are sourced within each individual 
teams’ investment process, as best suits the particular 
asset class in question. The Long-Term Income Fund, 
for example, sources direct and indirect infrastructure 
investments into sectors likely to benefit from the 
UK’s climate transition. As shown in figure 5.4.5.1, 
about 32% of the fund’s investments are in renewable 
energy. 
To date, given the importance of asset valuations 
noted above, Railpen’s (and by association the 
Trustee’s) approach to identifying climate opportunities 
has been bottom-up, as opposed to setting a top-
down target for such investments. Further work on 
climate solutions is ongoing at Railpen, for example 
exploring the opportunity set for climate solutions 
within private markets, and being lead authors on the 
IIGCC’s Climate Solutions Guidance for Listed Equity 
and Corporate Fixed Income, which was published 
in November 2023. There might also be investment 
opportunities arising in relation to biodiversity and 
natural capital and, to support this work, Railpen has 
become a member of the Taskforce for Nature-Related 
Financial Disclosure (TNFD) forum.
Figure 5.4.5.1: Investments in the Long-Term Income 
Fund by sector (as of December 2023)
Real Estate
Renewable energy
Multi-sector infrastructure
Student loans
Water utility
Sector
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes
32	 HM Government UK Climate Change Risk Assessment 
2022
33	 For the avoidance of doubt, this is not an expectation 
about investment return.
34	 Policy paper: British Energy Security Strategy 2022  
ector
36%
32%
25%
5%
2%

page 60
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Climate risks
in the schemes
Metrics and 
targets
Glossary
Appendices
6. Metrics, targets and the transition to net zero
6.1 Selection of metrics and targets, data 
availability and limitations
Pension schemes are required by Regulation to select 
certain climate metrics for the purposes of monitoring 
and reporting on climate-related risks. In addition, the 
Trustee is required to set at least one target in relation 
to at least one of the selected climate metrics. The 
Trustee has selected the metrics and targets indicated 
in figure 6.1.1. The Trustee’s selection of climate 
metrics and targets will be reviewed from time to time, 
as appropriate. Further information on the metrics is 
available in Appendix B. Since the publication of the 
previous TCFD report, the Trustee reviewed its metrics 
and resolved to retain the same metrics. We are also 
continuing to report this year on section-by-section 
climate metrics35 (see Appendix E). 
Description
Selection rationale 
Target
Total GHG emissions36 
(tCO2e) 
This is an absolute emissions metric that 
measures the total greenhouse gas emissions 
attributable to a portfolio
Recommended by statutory guidance
-
Carbon footprint
(tCO2e/ £m invested)
Also referred to as Financed Emissions, this is a 
common measure of emissions intensity and is 
interpreted as “the amount of GHGs emitted for 
each £m invested in the portfolio”
Recommended by statutory guidance
By dividing emissions by the £m invested in 
the fund, the metric can be used to compare 
portfolios
25-30% reduction by 2025
50% reduction by 2030
Portfolio alignment 
(%)
Proportion of the portfolio37, measured by 
AUM, aligned to a net-zero pathway. Defined 
in the statutory guidance as a ‘binary target 
measurement’
n Forward-looking metric 
n Simple to understand
n Linked to industry frameworks such as the 
    Net Zero Investment Framework38 
n Conducive to investment stewardship
    activities, e.g. engaging portfolio companies
    for net-zero alignment
100% of the AUM in 
material sectors to be rated 
as ‘aligning’ or ‘fully aligned’ 
by 2040
Company 
engagement (%)
Proportion of the portfolio37, weighted by 
financed emissions, being engaged
PCRIG’s39 definition of best practice recommends 
disclosing a ‘process-based’ metric
70% of financed emissions 
under engagement (or 
already aligned to net zero) 
by 2020, rising to 90% by 
2030
Figure 6.1.1: Trustee’s selection of climate metrics 
36	 Scopes 1 and 2, as explained in this section.
37   Considering companies that are the biggest contributors 
to the schemes’ financed emissions in relevant investment 
portfolios, as still detailed below.
38	 Authored by the Paris Aligned Investing Initiative.
39	 Pensions Climate Risk Industry Group.
35	 For the avoidance of doubt, the Trustee’s selection of 
metrics and targets apply to the railways pension schemes 
overall, and are the same for the underlying RPS and 
BTPFSF schemes and relevant DC arrangements.
Taskforce on Climate-related Financial Disclosure

page 61
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Data we have been able and unable to gather: 
For the purposes of the 2023 TCFD report, the 
Trustee has obtained Scope 1 and Scope 2 GHG 
emissions data as far as able to do so40. In addition, 
the Trustee has obtained Scope 3 GHG emissions 
data although, for Scope 3, data availability is lower, 
reliability is uncertain, and the risk of double-counting 
is significantly increased compared to Scopes 1 and 2. 
The total GHG emissions and carbon footprint metrics 
cover the schemes’ investments in public equities and 
corporate fixed income, unless otherwise stated. 
Whilst Railpen, on behalf of the Trustee, has begun to 
gather GHG data for property and private markets, we 
believe that the quality and availability of GHG data 
in these asset classes is, unfortunately not sufficiently 
mature for the production of useful metrics at this 
time. Unlike public markets, gathering GHG data for 
other asset classes remains time-consuming and costly 
and is not a good use of scheme members’ money. 
By way of example, property as an asset class suffers 
from missing data in tenant electricity and gas 
consumption, leading to a lack of tenant emissions 
data (tenant emissions often comprise the vast majority 
of a building’s GHG emissions, so excluding tenant 
emissions from property metrics would undermine 
their usefulness). Similarly, private equity suffers from 
persistent data gaps as private companies are usually 
not required to publish GHG data. Whilst commercial 
GHG data providers offer estimations or proxies, these 
are challenged by the varying quality of estimation 
models, cost, and reliance on company financial data 
that might not be easily accessible.
This year, we have reported some data for the 
schemes’ infrastructure assets (see section 6.2.1), 
covering five assets worth £388.5m in committed 
capital. We have been unable to gather GHG data for 
the remainder of the assets held in this pooled fund 
for a mixture of three reasons, which are (i) the data 
are too costly or time-consuming to derive, (ii) we are 
awaiting the result of commissioned analysis, or (iii) we 
have no right to access the GHG data for that asset. 
We hope to be able to report increased coverage in 
future TCFD reports. 
Despite the lack of available GHG data, the Trustee, 
and those acting on the Trustee’s behalf, monitor and 
manage climate risks in property, private equity, and 
infrastructure portfolios, as detailed above. Railpen is a 
member of several initiatives and working groups with 
a remit to improve sustainability disclosure41. To the 
extent that they are able to do so, the Trustee aims to 
report GHG data for additional relevant asset classes in 
future TCFD reports. 
We have reported some information in section 6.2.2 
in relation to the schemes’ investments in sovereign 
bonds, and the associated GHG emissions and 
alignment status. Emissions data are sourced from 
what was the Department for Business Energy & 
Industrial Strategy. Gross Domestic Product (GDP) 
data are sourced from the Office for National Statistics 
(ONS). For methodological reasons, GHG emissions 
and alignment metrics associated with government 
bonds cannot be easily aggregated to public equities 
and corporate fixed income, and the information is 
therefore reported separately. 
Methodology: For the total GHG emissions and 
carbon footprint metrics, emissions are apportioned to 
our portfolio based on the proportion of each portfolio 
company’s enterprise value (including cash) owned by 
our portfolio. Using enterprise value (which comprises 
both equity and debt) to apportion emissions 
legitimises the aggregation of apportioned emissions 
across listed equity and corporate fixed-income 
investments. Further information on the metrics is 
available in Appendix B.
Most of the reported GHG data relate to investments 
managed internally by Railpen, though several 
portfolios managed externally are also included in 
the analysis. The climate metrics for both internally 
and externally managed investments are calculated 
by Railpen using a consistent methodology and a 
consistent set of climate data service providers (i.e. 
it has not been necessary to combine distinct GHG 
data from several fund managers based on divergent 
methodologies).
Data quality and proportion of assets for which 
data was available (and on which we are 
reporting): Around three-quarters of the schemes’ 
assets have some GHG data used and reported in this 
TCFD report. We have reported the data coverage and 
quality below; however, since our two data providers 
have different ways of reporting ‘data quality’, we are 
unable to report the proportion of the data that are 
‘verified’ (as opposed to merely ‘reported’). In addition, 
the Scope 3 dataset does not allow us to break 
down the data quality of Scope 3 data into ‘verified’, 
‘reported’, and ‘estimated’.  
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes
40	 GHG emission scopes are defined in the Glossary. See 
category 15 emissions (investment emissions) in the GHG 
Protocol Technical Guidance for more information. 
41  See section 6.4.3

page 62
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Coverage and methodology of the alignment 
metric: Consistent with last year’s TCFD report, the 
Trustee’s chosen alignment metric is a ‘binary target 
measurement’, calculated through company-specific 
analysis conducted by Railpen’s Sustainable Ownership 
team, using a proprietary CRIANZA assessment 
framework, explained in section 5.4. This framework 
sets a high bar for a company to be described as 
‘Aligning’ to net zero. The assessment is such that 
a company cannot be described as being aligned to 
the Paris Agreement merely by virtue of having set a 
quantitative target: any targets should be backed by a 
credible implementation plan and a demonstrable track 
record of executing the plan. Over-reliance on a target 
could lead to an under-appreciation of the level of risk 
faced by a company. 
The Trustee’s alignment metric aims to cover portfolio 
companies constituting at least 70% of the financed 
emissions in material sectors across equities and 
corporate fixed-income portfolios42 (by stating coverage 
in terms of financed emissions rather than AUM, we 
prioritise assessing the largest emitters rather than 
simply the largest holdings by market value). Whilst 
we have commented on the alignment status of our 
investments in sovereign bonds in section 6.2.2, this 
information is reported separately in that section 
given the different methodology used. We have not 
produced alignment metrics for unlisted asset classes 
because there is limited data available43.
Methodology used to measure performance 
against targets: The Trustee has selected climate 
targets as noted in figure 6.1. These targets are 
consistent with Railpen’s targets in its Net Zero Plan 
(see section 6.3). Performance against the targets 
is explained below. The same methodology used 
in generating climate metrics is used to assess 
performance against targets. For example, to measure 
progress on the carbon footprint target, the same 
methodology is used to calculate the carbon footprint 
metric in the base year and in the current year, 
facilitating an observation of the rate of improvement. 
Measuring performance against targets is subject to 
the same degree of estimation as is present in the 
generation of climate metrics.
During 2023, two new strategies were implemented 
as part of the Growth Pooled Fund. In April 2023, 
the Energy Transition Portfolio (ETP) was established, 
which is an actively managed, concentrated public 
equity strategy. The portfolio invests in companies 
predominantly in the energy, utilities and materials 
sectors. Our Portfolio Management and Sustainable 
Ownership teams work closely together to assess 
and engage with each company, focused on credible 
climate transition plans and meaningful investor-
investee dialogue.
In July 2023, Railpen announced that it had awarded 
a £2bn mandate to manage a liquid multi-asset 
credit strategy to Neuberger Berman – a private, 
independent, and employee-owned investment 
manager. The mandate establishes a strategic 
partnership between the two firms and will focus on 
investments across a broad range of credit sectors, 
covering both the investment grade and non-
investment grade space. The strategy aims to deliver 
attractive risk-adjusted returns, utilising Neuberger 
Berman’s extensive expertise in fixed income investing, 
and ESG proficiency.
Both of these strategies are likely to cause the overall 
sectoral and regional weights of the Growth Pooled 
Fund to change. Given the concentration of Scope 1 
and Scope 2 emissions in certain sectors and regions – 
including the energy, utilities and materials sectors, for 
example – this will likely increase the GHG footprint 
of the Growth Pooled Fund in the near term. For both 
strategies, detailed climate and wider ESG analysis, 
combined with active ownership and corporate 
engagement, are central elements of the investment 
approach. This is to help ensure that the particular 
climate risks and opportunities of each strategy are well 
understood and effectively stewarded over time, with 
the goal that the emissions profile of these strategies 
fall in due course (noting performance amongst other 
performance indicators is also targeted and tracked).
The 2023 TCFD report produces climate metrics for 
investment holdings as of 31 December 202344. The 
base year is, however, December 2020 and the base 
year metrics are provided in section 6.2.
Given the two significant and new strategies 
established in 2023, a comparison of performance 
against the targets and baseline year is difficult. In 
line with the industry guidance around re-baselining, 
including where sectoral and regional allocations 
have changed during the period under measurement, 
Railpen will develop a re-baselining framework that 
enables improved comparison over time, aiding 
transparency and accountability. In the interim, we 
have shown 2023 metrics in figure 6.2.1 both with, 
and without, the two strategies established in 2023. 
The first column shows performance on a ‘comparative 
basis to the base year’ (i.e. excluding the two strategies 
introduced in 2023), and the second column shows 
performance with those two new strategies included. 
The fourth column shows performance against both 
configurations, emphasising the former, which we 
believe to be a more reasonable comparison. In figures 
6.2.2 and 6.2.3, as well as Appendix E, we have 
included the two strategies introduced in 2023 in all 
the metrics presented.
Taskforce on Climate-related Financial Disclosure
42	 Following guidance from the Paris Aligned Investing 
Initiative’s Net Zero Investment Framework.
43   As noted in the Statutory Guidance,“It is not meaningful 
for trustees to try to measure alignment for sections of the 
portfolio they do not have data for”.
44	 The company engagement coverage metric was in part 
calculated based on holdings as at 1 January 2023 
given the engagement programme of focus companies 
is decided at the start of the year. In addition, the ETP 
holdings have been added to this metric as these holdings 
were added to the engagement plan when the portfolio 
was introduced in April 2023. Exact engagement coverage 
will vary throughout the year in part due to changes in 
holdings and underlying emissions.
Climate risks
in the schemes

page 63
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Metric
2023 on comparative basis to 
the base year (A)
2023 including strategies 
incepted in 2023 (B)
Base year
Performance 
vs. A (vs.B)
Target
Total GHG emissions45  
(tCO2e) 
632,481
951,711
1,191,915
-47% (-20%)
-
Carbon footprint
(tCO2e/ £m invested)
43
60
70
-38% (-14%)
25-30% reduction by 2025
Portfolio alignment 
(%)
3%
4%
1%46
+203% (+275%)
100% by 2040
Company engagement (%)
71%47
70%
+1%
70% today, rising to 90% by 
2030
Taskforce on Climate-related Financial Disclosure
45	 The Scopes 1 and 2 GHG emissions. Data Source: 
Bloomberg, MSCI (Disclaimer in Appendix C). 
46   The Alignment Metric was first computed in February 
2022.
47	 Given the engagement programme of focus companies is 
decided at the start of the year, the holdings in the newly 
established portfolios were not necessary included in that 
initial plan. However, all of the companies within the ETP 
were subject to engagement during 2023, and the IMA 
for the Neuberger Berman strategy includes engagement 
requirements aligned to the above metrics and targets, 
including the minimum threshold of securities contributing 
70% of financed emissions from material sectors in the 
strategy being either aligned to net zero or subject to 
engagement on an ongoing basis. The disclosed metric 
has been calculated to include all holdings including in 
the engagement plan at the start of 2023 (using their 
respective financed emissions at that time) together with 
the ETP holdings (using their respective financed emissions 
as at the end of 2023, in line with the other ETP-related 
disclosures in this report). The denominator used is a 
simple average of the total emissions at the start and end 
of 2023.
Climate risks
in the schemes
6.2 Metrics and targets: 2023 data
The metrics and their values as of 31 December 2023 and the base year (December 2020) are as indicated in figure 6.2.1 (below). 
The 38% reduction in carbon footprint (excluding new 
strategies established during 2023) is suggestive of 
being on track to meet the 2025 target. The drivers 
of this rate of reduction are various, and not always 
due to actual, real-world emissions reductions in our 
underlying investments. We also note that carbon 
footprint can be a volatile measure, particularly over 
short time periods, and therefore, we try not to draw 
definitive conclusions when assessing over a relatively 
short time horizon. Including the new strategies 
introduced in 2023 leads to a 14% decrease in carbon 
footprint relative to the base year. The smaller decrease 
is materially driven by the sectoral and regional 
exposures in those new strategies, as described in 
section 6.1. As also highlighted in that section, in 
order to aid comparability with the base year, we plan 
to develop a re-baselining methodology in line with 
industry guidance.
The Trustee believes it is important that investors’ 
emissions reductions targets are driven as far as 
possible by activities that lead to emissions reductions 
in the real world (as opposed to changes in portfolio 
emissions driven by the act of one investor selling 
investments to another investor). The steps taken to 
achieve the climate targets are motivated by this belief. 
These steps are outlined in section 6.4. 
The portfolio alignment metric was calculated through 
a company-specific analysis conducted by Railpen’s 
Sustainable Ownership team, using the proprietary 
CRIANZA assessment framework explained in section 
5.4. This framework sets a high bar for a company to 
be described as ‘aligning’ to net zero, and the data 
shown in figure 6.2.1 reflects this. We note there has 
been some progress versus the prior year, however, the 
absolute level of alignment remains low.
Figure 6.2.1: Total schemes’ climate metrics and targets, 2023

For the pooled funds, the data in figure 6.2.2 suggest 
that: 
n	
The Global Equity Pooled Fund (an index-tracking 
strategy) is more emissions-intensive than the 
other equity pooled funds – whether managed on 
an alternate index-tracking, active or quantitative 
basis – potentially due to more emerging markets 
concentration
n	
The pooled funds investing in corporate fixed-
income assets (Non-government Bond Pooled 
Fund and DC Corporate Bond Fund) are about as 
emissions-intensive as the pooled funds investing 
in listed equity, suggesting that asset class is not 
a driver of corporate carbon intensity in listed 
markets on this occasion  
n	
There is the least data coverage for the Growth 
Pooled Fund, driven primarily by the allocations 
to asset classes outside the scope of current GHG 
emissions data collection, as explained in 
	
section 6.1
n	
There have been some material year-on-year 
movements, which highlights that GHG 
	
emissions-related metrics can be volatile measures 
and therefore it may be more reasonable to draw 
inferences on longer-term trends rather than 
	
short-term variations
page 64
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Figure 6.2.2: Climate metrics by pooled fund (as of 31 December 2023)48
Total GHG 
emissions49 
(tCO2e)
Carbon 
footprint 
(tCO2e/£m 
invested)
Portfolio 
alignment 
(%)
Data 
quality: 
reported 
GHG data 
(%)        
Data 
quality: 
estimated 
GHG data 
(%) 
Data 
quality: 
unavailable 
GHG data 
(%)
Total Scope 
3 GHG 
emissions
(tCO2e)
Scope 3 
carbon 
footprint 
(tCO2e/£m 
invested)
Scope 3 data 
quality: reported 
+ estimated GHG 
data (%)
Scope 3 data 
quality: 
unavailable 
GHG data (%)
Defined Benefit 
Pooled Funds
Growth Pooled 
Fund50 int, eq 
820,778
59
4
48
21
31
6,242,886
462
67
33
Passive Equity 
Pooled Fund ext, eq 
11,754 
52
n/a
62
26
13
110,443
500
85
15
Global Equity 
Pooled Fund ext, eq 
46,807 
91
n/a
73
22
5
381,628
770
91
9
Non-government 
Bond Pooled 
Fund ext, fi
19,977
63
n/a
73
19
8
198,924
642
90
10
Defined 
Contribution 
Pooled Funds
DC Long-Term 
Growth Fund int, eq 
37,661
59
4
48
21
31
286,448
462
67
33
DC Global Equity 
Pooled Fund ext, eq 
10,267
52
n/a
62
26
13
96,478
500
85
15
DC Corporate 
Bond ext, fi 
4,472
63
n/a
73
19
8
44,534
642
90
10
int	 internally managed portfolios
ext  externally managed portfolios
48	 As per explanation in section 6.1, these data include the two strategies incepted in 2023.
49	 GHG scopes 1 and 2; Source: Bloomberg; MSCI (please see Appendix C for disclaimer).
50	 Includes listed equity investments in the Growth Pooled Fund only.
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes
eq	 listed equity portfolios
fi	
corporate fixed income portfolio

page 65
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Taskforce on Climate-related Financial Disclosure
Figure 6.2.3: Climate metrics by scheme (as of 31 December 2023)51
Total GHG 
emissions52 
(tCO2e)
Carbon 
footprint 
(tCO2e/£m 
invested)
Data quality: 
reported GHG 
data (%)        
Data quality: 
estimated GHG 
data (%) 
Data quality: 
unavailable 
GHG data (%)
Total scope 3 
GHG emissions
(tCO2e)
Scope 3 carbon 
footprint 
(tCO2e/£m 
invested)
Scope 3 data 
quality: reported 
+ estimated GHG 
data (%)
Scope 3 data 
quality: 
unavailable 
GHG data (%)
RPS
908,882
60
49
21
30
7,034,146
478
68
32
Of which DB sections 
856,633
60
49
21
30
6,607,953
478
68
32
Of which BRASS 
41,821
58
52
22
26
340,917
483
72
28
Of which AVC Extra 
972
57
57
22
21
8,517
515
77
23
Of which IWDC 
9,456
59
52
21
27
76,759
488
71
29
BTPFSF
38,384 
59
48
21
31
292,123
463
67
33
Of which DB sections 
38,177
59
48
21
31
290,380
462
67
33
Of which BRASS 
115
57
53
22
25
959
489
73
27
Of which AVC Extra 
91
59
56
21
23
784
519
75
25
BRSF
4,497
72
56
21
22
35,473
588
75
25
Of which DB sections 
4,497
72
56
21
22
35,473
588
75
25
51	 As per explanation in section 6.1, these data include the two strategies incepted in 2023.
52	 GHG scopes 1 and 2; Source: Bloomberg; MSCI (please see Appendix C for disclaimer).
Climate risks
in the schemes

page 66
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
6.2.1 Metrics: 2022 data – supplement on the Long-Term Income Pooled Fund 
This year we have been able to gather GHG data for some infrastructure investments held in the Long-Term Income 
Pooled Fund. We have been able to include five assets covering £388.5m in committed capital. The data are shown 
in figure 6.2.1.1 (below). 
Many of the assets in this fund are involved in the climate transition. As such they will create a net GHG ‘saving’ 
during their lifecycle (for example as renewable energy production (from our assets) displaces fossil fuel-based 
generation (from the grid)). However, such data are not reporting requirements and are not displayed in figure 
6.2.1.1. In our view such assets represent significant climate opportunities.
Figure 6.2.1.1: Climate metrics for the Long-Term Income Pooled Fund (as of 31 December 2023)
Taskforce on Climate-related Financial Disclosure
Total GHG 
emissions 
(tCO2e)
Carbon 
footprint 
(tCO2e/£m 
invested)
Portfolio 
alignment (%)
Data quality: 
reported 
GHG data (%)        
Data quality: 
estimated 
GHG data (%) 
Data quality: 
unavailable 
GHG data (%)
Total Scope 
3 GHG 
emissions
(tCO2e)
Scope 3 
carbon 
footprint 
(tCO2e/£m 
invested)
Scope 3 data 
quality: reported 
+ estimated GHG 
data (%)
Scope 3 data 
quality: 
unavailable 
GHG data (%)
Long-Term Income 
Pooled Fund53 
83,858
    216 
n/a
31%
0%
69%
14,494
68 
17%
83%
53	 Two of the assets covered in Figure 6.2.1.1 are renewable biomass energy assets. The production of energy at these assets 
produces biogenic CO2 emissions. These emissions are considered out of scope as the direct CO2 emissions from these fuels are 
not included in the Scope 1 emissions factors (DEFRA, 2009).
Climate risks
in the schemes

page 67
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Climate risks
in the schemes
Metrics and 
targets
Glossary
Appendices
Taskforce on Climate-related Financial Disclosure
6.2.2 Metrics: 2023 data – supplement on 
sovereign bonds
The schemes invest in UK government bonds. In 2022 
(the most recent year for which the UK has reported 
‘final’ GHG data), net territorial UK GHG emissions 
were 406m tCO2e 54, 55. GHG emissions in 2022 were 
around 9% lower than in 2019 (most recent pre-
pandemic year), and have decreased by about 50% 
since 1990. It is interesting to note that domestic 
transport was the largest emitting sector, with the 
greatest contribution to those emissions coming from 
road-based travel. Rail travel represents one of the 
most carbon-efficient forms of transport based on 
carbon footprint of travel per distance56.
The ‘carbon footprint’ of the UK in 2022 was 190 
tCO2e per £m of UK economic activity on a residence 
basis57. 
In terms of an alignment metric, the UK has a target 
to be net zero by 2050, which the government 
states is consistent with its commitment under the 
Paris Agreement. The UK ranks 20th in the Climate 
Change Performance Index (CCPI) 202458, achieving 
a ‘Medium’ rating. CCPI assesses individual countries’ 
climate protection efforts and performance. CCPI ranks 
the UK high in the GHG emissions and energy use 
categories, but low in renewable energy and climate 
policy. The authors of the CCPI state that no countries 
achieve their highest (i.e. best) rating, and on a global 
basis governments are not doing enough to prevent 
warming in excess of the ambitions laid out in the Paris 
Agreement. 
The Trustee does not believe it is meaningful to 
combine data relating to sovereign bond investments 
with data for other asset classes. Climate scenario 
analysis suggests that the yields on UK gilts are 
unlikely to be significantly affected by climate change, 
suggesting that disclosure and action on other asset 
classes ought to take priority.  
In line with its Net Zero Plan, Railpen engages with 
climate policymakers in the UK with the aim of 
supporting a just transition in line with the goals of 
the Paris Agreement. Some highlights of recent policy 
engagement are included in section 6.4.2. 
Figure 6.2.2.1: UK GHG emissions from domestic transport, 2016-2021
140
120
100
80
60
40
20
0
2016
2017
2018
2019
2020
2021
Other
Domestic
aviation
Railways
Shipping
Road
Greenhouse gas
emissions (MtCO2e)
54	 2022 UK Greenhouse Gas Emissions, Final Figures  
55	 At the end of 2023 the RPS had £3.6bn invested in various types of UK government bonds.
56	 Which form of transport has the smallest carbon footprint? - Our World in Data, 2023, based on UK Government’s 
Department for Energy Security and Net Zero.
57	 Greenhouse gas emissions, UK: provisional estimates, 2022 Greenhouse gas emissions, UK - Office for National Statistics 
58	 CCPI 2024 Country Ranking United Kingdom

page 68
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
6.3 Net Zero Plan
The climate targets selected by the Trustee are consistent 
with those in Railpen’s Net Zero Plan. The targets were 
developed by drawing on the Paris Aligned Investing 
Initiative’s Net Zero Investment Framework, and other 
practitioner resources, including Partnership for Carbon 
Accounting Financials (PCAF) and the Institute for 
Sustainable Futures (ISF). For further information please 
refer to Railpen’s Net Zero Plan59.
2020
0
25
50
75
100
2023
2025
2030
2050 or sooner
Financed emissions, tonnes GHGs per £m invested
Financed emissions
of a global index
Net zero
Baseline
14-38% lower
25-30% lower
50% lower
Taskforce on Climate-related Financial Disclosure
59	 Railpen’s Net Zero Plan
60	 Please refer to sections 6.1 and 6.2.1 for detail around 2023 progress.
Figure 6.3.1: Railpen’s GHG reduction reference target60
6.4. Net-zero stewardship
Whilst the ways in which climate-related risks play out 
is highly uncertain, the Trustee believes it is important 
to take actions that reduce climate-related risks, 
including through investment stewardship. Climate 
stewardship activities are taken on the Trustee’s behalf, 
primarily by Railpen. Certain service providers and 
external fund managers also carry out investment 
stewardship activities for the Trustee. Done well, 
climate stewardship can, for example, help to manage 
the climate risks and opportunities faced by companies 
in the schemes’ investment portfolios.  
Further, as noted above, the Trustee believes it is 
important that investors’ emissions reductions targets 
are driven as far as possible by activities – including 
stewardship activities – that lead to emissions 
reductions in the real world (as opposed to changes in 
portfolio emissions driven by the act of one investor 
selling investments to another investor). There is a 
causal connection between engaging companies for 
improved alignment, and reducing the carbon footprint 
of the portfolio. Referring to the Trustee’s targets set 
out in section 6.1, the company engagement target 
supports the alignment target, which in turn supports 
the carbon footprint target (figure 6.4.1). At the 
present time, company engagement is the main step 
the Trustee is taking to achieve its climate targets.
If engagement proves unsuccessful, disinvestment 
will be considered. Any potential disinvestments will 
be weighed in the context of the broader mandate 
objectives. 
Other steps available to the Trustee to achieve its 
climate targets include asset allocation changes, 
tightening the existing climate-related exclusions 
policies (for example lowering the threshold for the 
exclusion of thermal coal and tar sands companies 
from 30% of revenue), or updating mandates and 
re-negotiating investment management agreements 
to include climate targets alongside existing mandate 
objectives.
Engagement target
Successful engagement 
leads to improved company 
alignment
Alignment target
Alignment to net zero 
leads to long-term 
decarbonisation
Carbon footprint target
To halve financed emissions 
by 2030
Figure 6.4.1: Relationship between climate targets
Climate risks
in the schemes

page 69
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
6.4.1 Net Zero Engagement Plan (NZEP)
Railpen has set out a Net Zero Engagement Plan 
(NZEP), the purpose of which is to deliver against 
the reference targets outlined in the Net Zero Plan 
(these targets are consistent with the Trustee’s targets 
in section 6.1). By executing on the NZEP, Railpen 
is taking steps that support the achievement of the 
Trustee’s climate targets. 
The NZEP uses a four-step approach of prioritisation, 
analysis, engagement and voting, and reporting of 
the decarbonisation impact on portfolio companies 
(figure 6.4.1.1). This approach draws heavily on the 
Institutional Investor Group on Climate Change’s 
(IIGCC) Net Zero Stewardship Toolkit, which provides 
investors with a foundational process to enhance their 
stewardship practices to deliver the rapid acceleration 
in decarbonisation required to achieve net zero by 
205061. 
Figure 6.4.1.1: Four-step approach in Railpen’s NZEP
61	 Railpen co-chaired the working group and co-authored the Net Zero Stewardship Toolkit.
Prioritisation
Identify the portfolio 
companies to be engaged, 
using several prioritisation 
criteria
Analysis
Assess the companies’ 
exposure to climate risks and 
opportunities, and current 
alignment status
Engagement impact and reporting
Identify company improvements, remaining gaps, 
report progress and re-prioritise
Engagement
Engage and vote to 
encourage companies to 
close gaps in their risk and 
alignment practices
Iterative feedback 
loop for 
engagement
Taskforce on Climate-related Financial Disclosure
The initial prioritisation of companies for engagement 
was based on priority portfolios, holding amounts, 
and financed emissions. However, prioritisation can 
be enhanced following analysis and/or engagement, 
so the NZEP operates an iterative feedback loop, as 
depicted in figure 6.4.1.1. Analysis and/or engagement 
can improve prioritisation through more informed 
consideration of aspects such as the expected duration 
of the holding in Railpen portfolios, expected level of 
company access, and likelihood of achieving change. 
The prioritisation used in 2023 is summarised in figure 
6.4.1.2 (below).
As noted above, given the engagement programme of 
focus companies is established at the start of the year, 
the holdings in the newly-formed Energy Transition 
Portfolio (ETP) and Neuberger Berman mandate were 
not necessarily included in that initial plan. However, 
all of the companies within the ETP were subject to 
engagement during 2023, which led to an additional 
nine companies being targeted for Tier 1 engagement. 
In addition, the Investment Management Agreement 
(IMA) for the Neuberger Berman mandate includes 
engagement requirements aligned to the above metrics 
and targets, including the minimum threshold of 
securities contributing 70% of financed emissions 
from material sectors in the strategy being either 
aligned to net zero or subject to engagement on 
an ongoing basis.
Figure 6.4.1.2: Prioritisation of companies within the NZEP
Tier 1
Tier 2
Total
Companies in scope for engagement (#) 
30
18
48
Financed emissions (% of total in material sectors)
29%
21%
50%
Tier 1
Tier 2
Total
Companies in scope for engagement (#) 
30
18
48
Financed emissions (% of total in material sectors)
50%
21%
71%
Climate risks
in the schemes
As a start of 2023:
After Energy Transition Portfolio inception:

page 70
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
The aim of the engagement phase of the NZEP is 
to align key emitters to a net-zero trajectory, adopt 
interim and long-term targets, and improve climate risk 
management. This is intended to be achieved through 
a combination of collaborative engagements (for 
example, via Climate Action 100+), direct engagements 
with companies, and public policy engagement. 
Companies are allocated to tiers based on the form 
and substance of the engagement activity:
n	
Tier 1 companies are subject to collaborative and/
or direct engagement, including (as appropriate) 
meetings, calls, and written contact with 
management, investor relations and the company 
board. Shares are actively voted for all resolutions.
n	
Tier 2 companies are analysed, monitored, 
and shares are actively voted. Climate policy 
engagements targeted on certain jurisdictions may 
be carried out.
The Net Zero Engagement Plan was introduced in 
2022. As with last year’s TCFD report, we present 
some early-stage engagement case studies in figures 
6.4.1.3 (right) and 6.4.1.4.
Taskforce on Climate-related Financial Disclosure
Figure 6.4.1.3: A direct engagement case study for a US steel producer and US electric utility held in Railpen’s
	
	
	
      quantitative equities portfolio
Background
We use our climate assessment framework to help 
us understand which climate issues could be most 
material to a portfolio company, and how well 
they’re being addressed. 
Within our Net Zero Engagement Plan, we engaged 
with companies such as Nucor, a large US-based 
steel producer, due to its high emissions footprint 
and intensity, and WEC Energy, a large US electric 
utility, due to its reliance on coal-fired generation.
Objective
We think companies should set clear, measurable 
targets and disclose the detailed plans they have 
in place to meet those targets. As proactive 
shareholders, we work hard to engage with the 
companies in our portfolio that are most exposed 
to material issues and risk. We also share the 
experiences and insights we’ve gained from other 
engagements we’ve had. 
We aimed for both companies to adopt climate 
targets and to engage with them as they developed 
strategies to reach those targets.
 
Approach
Despite being a large contributor to our financed 
emissions, Nucor is also North America’s largest 
recycler of scrap metal and a leading scrap broker. 
Significant use of electric arc furnace technology 
and a very prudent management team also 
counterbalance its emissions footprint and intensity. 
We originally assessed the company as ‘not aligned’ 
to net zero in February 2022. 
We focused our engagement with Nucor on areas 
including:
n	
Setting science-based interim and long-term 
net-zero targets for Scope 1, 2 and 3 emissions
n	
Improving climate disclosures, TCFD reporting 
and adopting the SASB framework
n	
Developing a decarbonisation strategy
WEC Energy has a strong management team 
committed to long-term emissions reduction and 
transitioning to a mix of renewables, nuclear and 
gas-fired power generation. This contributed to our 
assessment of it in 2022 as ‘committed’ to net zero.
We focused our engagement on areas including:
n	
Accelerating the phase-out of coal for power 
generation
n	
Setting net-zero targets, a decarbonisation 
strategy and increasing investment in 
renewables
n	
Improving climate governance
Outcome
During 2022-2023, both companies made good 
progress.
Nucor lowered the emissions intensity of its 
steelmaking operations by:
n	
Gradually increasing its use of micro mills
n	
Reducing Scope 2 intensity by focusing on 
renewables power purchase agreements (PPAs) 
for electricity use
n	
Increasing recycling
n	
Investing in carbon sequestration
n	
Partnering on nuclear fusion technology
Along with other initiatives, these actions spurred 
us to upgrade our assessment of the company to 
‘committed’. Its Transition Pathway Initiative (TPI) 
management quality score has also improved from 
2 to 3. And its TPI carbon performance assessment 
has improved as well. 
 
WEC Energy made rapid progress on its climate 
disclosures, including TCFD reporting and scenario 
analysis. It has also:
n	
Accelerated targets for coal phase-out from 
2035 to 2030
n	
Increased renewables investments from 2022 
to 2026
n	
Improved Board oversight on climate
Next steps
Across both companies, our next steps include 
encouraging continued improvements in areas such 
as governance, climate links to pay, just transition 
considerations and capital allocation. 
Climate risks
in the schemes

Figure 6.4.1.4: Collaborative engagement case study for a US-based utilities business held in Railpen’s 
	
	
	
      fundamental equities portfolio   
Background 
US-based NextEra is one of the world’s largest 
electric utilities and is significantly exposed to the 
risks of the climate transition. However, if it can also 
seize the opportunities, we believe it can be part of 
the solution. Therefore we wanted to engage with 
the company to better understand its approach and 
highlight our concerns on specific issues. 
Given its climate profile and material positioning 
in our portfolios, NextEra is one of our Net Zero 
Engagement Plan priority companies. In 2022, it 
announced its plan for ‘Real Zero’, which included 
emissions reduction targets, and committed to 
significantly increasing its use of renewable energy. 
We’ve identified climate lobbying as a key thematic 
priority across our portfolios, and also a priority issue 
for NextEra, in particular. In addition, we’re part 
of the climate lobbying working group, a thematic 
activity within the Climate Action 100+ initiative. 
Accordingly, a focus of our engagement with 
NextEra has been on disclosure around climate policy 
and lobbying.
Objective
We aimed to highlight the importance of climate 
lobbying disclosure, especially in a US context, and 
encourage improved practices. At the same time, we 
wanted to direct NextEra to best practice guidelines 
and resources on the topic.
Approach
Together with the other CA100+ participants, we 
raised climate lobbying with the company. This 
included using the lever of co-filing a shareholder 
resolution at the end of 2022 to request a public 
disclosure report.
By engaging constructively, we were able to 
highlight examples of peer disclosures, including 
the utilities companies Dominion and NRG. We 
shared Ceres guidance on responsible lobbying 
standards and the global standard on responsible 
climate lobbying. We also connected NextEra 
with InfluenceMap, who assess corporate climate 
lobbying practices and disclosures.
NextEra responded well to our engagement. 
The company indicated it was happy to provide 
the disclosures we requested, allowing the lead 
resolution filer to withdraw ahead of the AGM. The 
company committed to liaising with the co-filers in 
the summer of 2023.
Outcome and next steps
Our engagement with NextEra has continued, but 
slowed partly because of personnel changes at 
the company. To escalate engagement and reflect 
concerns at the lack of progress, we co-filed a 
second resolution in 2023. 
 
We continue to have constructive dialogue on 
lobbying and wider ESG issues and hope to see 
improved disclosure soon.
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Climate risks
in the schemes
Metrics and 
targets
Glossary
Appendices
page 71
Taskforce on Climate-related Financial Disclosure

page 72
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Taskforce on Climate-related Financial Disclosure
6.4.2 Climate policy engagement
Successful climate policy is crucial to support 
companies, investors, and consumers in transitioning 
to a low-carbon economy. Railpen continued its policy 
advocacy activities in 2023, promoting progressive 
climate action towards a goal of net zero by 2050, 
or sooner.
Railpen focuses its policy engagement activities on an 
assessment of the importance of the topics to Railpen’s 
overall Net Zero Plan and its Net Zero Engagement 
Plan, and in recognition of our greater likelihood 
of influencing domestic policymakers given our 
relationships with UK policymakers as a UK pension 
scheme. 
Following on from policy engagement conducted 
in prior years, Railpen’s 2023 policy work and 
interventions were focused on:
n	
Simple and consistent disclosure of climate change 
information
n	
Disclosure of climate lobbying activities – both 
direct and indirect – and alignment of those 
activities with the goals of the Paris Agreement
n	
The development and disclosure of credible climate 
transition plans
n	
Taking a holistic approach to climate risk, including 
‘just transition’ considerations
In 2023, Railpen submitted written responses to select 
climate-related consultations and calls for evidence or 
information, including:
n	
Financial Reporting Council (FRC) call for evidence 
on the UK endorsement of IFRS S1 and S2
n	
International Sustainability Standards Board (ISSB) 
request for information on agenda priorities
n	
Principles of Responsible Investment (PRI) in a 
Changing World signatory consultation
n	
Assessing of Sovereign Climate-related 
Opportunities and Risks (ASCOR) framework 
indicators and assessments
Railpen’s consultation responses are published on the
Railpen website62.
Railpen was also involved in the writing of several 
industry guidance documents and frameworks,
including:
n	
UK Transition Plan Taskforce (TPT) Disclosure 
Framework and Asset Owners Sector Guidance
n	
Institutional Investor Group on Climate Change 
(IIGCC) Climate Solutions Guidance
n	
IIGCC Net Zero Bondholder Stewardship Guidance
Through 2024, Railpen intends to continue its policy
engagement in existing priority areas.
62	 Railpen - Engagement
Climate risks
in the schemes
6.4.3 Industry initiatives
RPTCL and Railpen are members of a range of industry initiatives. This supports our ambitions to have a positive 
influence on the climate policy agenda, advance Railpen’s aims in its Net Zero Plan, and promote good practice in 
the investment industry. 
In 2023, RPTCL and Railpen have collaborated closely with peer asset owners and industry initiatives in support of 
the finance industry’s push towards net zero. Amongst other activities, we:
n	
Continued to co-Chair the Investor Practices Programme within the Institutional Investor Group on Climate 
Change (IIGCC)
n	
Continued to be a member of the Global Steering Group of the Paris Aligned Investing Initiative (PAII)
n	
Participated as a member of the Steering and Advisory Committee for the Transition Pathway Initiative (TPI) 
n	
Participated in the UK Transition Plan Taskforce (TPT) Delivery Group
n	
Participated in the Climate Financial Risk Forum (CFRF)
n	
Co-chaired the IIGCC’s Climate Solutions Working Group
n	
Chaired and helped launch the IIGCC’s Bondholder Stewardship Working Group
n	
Contributed to conferences, webinars, and articles supporting investors looking to set and deliver against 
net-zero targets
Industry collaborations

page 73
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Glossary
n	
Aligned to Net Zero. A company which, though 
it might currently be an emitter of GHGs, has a 
credible commitment to be net zero by 2050 or 
sooner. 
n	
Asset class. A category of financial instruments, 
constituents of which share similar characteristics. 
Examples of asset classes include equities (stocks), 
bonds (fixed income), private equity, infrastructure, 
and property.
n	
AUM. Assets under management – an amount of 
money managed or invested.
n	
CA100+. Climate Action 100+, a global investor 
engagement initiative, seeking improved climate 
disclosure and practice by c.170 of the most 
systemically important GHG emitters.  
n	
Carbon footprint. In this report, carbon footprint 
refers to greenhouse gases (GHG) associated with 
some particular investment portfolio, measured 
in terms of the amount of GHGs emitted per £m 
invested. See Appendix B for more information. 
n	
Climate solutions. Goods and services involved 
either in mitigating the harmful effects of climate 
change or in providing climate resilience.
n	
Engagement. Communicating with a person or 
organisation with the aim of raising an issue or 
achieving change.
n	
ESG. The collective term for referring to 
‘environmental, social and governance’ issues.
n	
Financed emissions. GHG emissions that result 
from activities in the real economy financed by 
an investor’s lending and investment portfolios. 
In our Net Zero Plan, Railpen’s financed emissions 
are normalised relative to the amount of capital 
invested, and expressed as tCO2e/£m invested. 
This is referred to by PCAF (a global partnership of 
financial institutions that work together to develop 
and implement a harmonised approach to assess 
and disclose the greenhouse gas (GHG) emissions 
associated with their loans and investments) as 
‘Economic Emissions Intensity’, (see PCAF (2020), 
The Global GHG Accounting and Reporting 
Standard for the Financial Industry).
n	
GHG emissions. ‘Greenhouse gas’ emissions 
relate to the emissions of gases that are capable of 
absorbing infrared radiation and thereby trapping 
within the atmosphere. The 1997 Kyoto Protocol 
defines six gases as GHGs: Carbon dioxide, 
Methane, Nitrous Oxide, Hydrofluorocarbons, 
Perfluorocarbons, and Sulphur Hexafluoride. 
n	
IIGCC. Institutional Investors Group on Climate 
Change.
n	
Material sectors. Sectors defined as material 
according to the Paris Aligned Investing Initiative’s 
Net Zero Investment Framework. They are sectors 
with ‘NACE’ codes A-H and J-L, where NACE is 
the European statistical classification of economic 
activities. Please also refer to Appendix E to 
Railpen’s Net Zero Plan. 
n	
Net zero. A state in which the GHG emissions put 
into the atmosphere are approximately equal to 
the GHG emissions taken out of the atmosphere. 
In this document, ‘net zero’ typically refers to the 
emissions associated with companies in Railpen’s 
investment portfolio.
n	
Paris Agreement. The Paris Agreement on 
climate change is a 2015 global accord seeking 
to keep the rise in global average temperature to 
well below 2°C above pre-industrial levels and to 
pursue efforts to limit the increase to 1.5°C. As 
of 2021, the Paris Agreement has been signed by 
191 countries, and ratified by 186 countries. 
n	
Physical risks. Physical risks are those that pertain 
to the physical impacts that occur as the global 
average temperature rises. For example, the rise in 
sea levels could have impacts such as flooding and 
mass migration. Extreme weather events, such as 
flooding and fires, could become more frequent 
and severe, and these incidents could threaten 
physical assets and disrupt supply chains. 
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes

page 74
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
n	
Regulations. Occupational Pension Schemes 
(Climate Change Governance and Reporting) 
Regulations 2021, Occupational Pension Schemes 
(Climate Change Governance and Reporting) 
(Miscellaneous Provisions and Amendments) 
Regulations 2021, and Occupational Pension 
Schemes (Climate Change Governance and 
Reporting) (Amendment, Modification and 
Transitional Provision) Regulations 2022.
n	
RPTCL. Railways Pension Trustee Company 
Limited, the corporate trustee of the railways 
pension schemes.
n	
Scope 1 GHG emissions.  An organisation’s direct 
GHG emissions. These might be created as an 
organisation combusts fossil fuels, or uses fuel in 
transportation. 
n	
Scope 2 GHG emissions. An organisation’s 
emissions associated with the generation of 
purchased electricity, heating / cooling, or steam 
for own consumption.
n	
Scope 3 GHG emissions. An organisation’s 
indirect emissions other than those covered in 
Scope 2. This includes the emissions associated 
with an organisation’s supply chain and its 
customers.
n	
SO. Sustainable Ownership. The term Railpen 
uses to describe the incorporation of sustainability 
factors (including climate change) into the way it 
invests members’ money.
n	
Statutory guidance. Guidance issued by the 
Department for Work and Pensions named 
‘Governance and reporting of climate change risk: 
guidance for trustees of occupational schemes’.
n	
Stewardship. Stewardship involves using tools 
such as engagement, voting and advocacy as ways 
to shape corporate behaviour.
n	
Transition risks. Transition risks arise as we seek 
to realign our economic system towards
	
low-carbon, climate-resilient solutions. Changes 
in industry regulation, consumer preferences and 
technology will take place and impact on current 
and future investments. 
n	
Trustee. Railways Pension Trustee Company 
Limited (RPTCL), the corporate trustee of the 
railways pension schemes.
n Voting, a vote. Being a shareholder in a company 
(usually) gives the opportunity to vote on company 
matters at meetings such as an Annual General 
Meeting (AGM). The issues we can vote on include 
executive pay, the election of board directors, a 
climate change plan, and the financial report 
and accounts.
 
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes

page 75
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Appendix A: Index of statutory reporting requirements
DWP statutory 
guidance reference
Reporting requirement
Report 
section
Governance
33
In relation to the governance disclosure requirements, trustees must describe in their 
TCFD report:
n how they maintain oversight of climate-related risks and opportunities which      
are relevant to the scheme;
4.2
n the roles of those undertaking scheme governance activities in identifying, 
assessing and managing climate-related risks and opportunities relevant to those 
activities;
4.5
n the processes the trustees have established to satisfy themselves that those 
undertaking scheme governance activities take adequate steps to identify, assess 
and manage those risks and opportunities;
4.2; 4.4; 4.6; 
4.7
n the role of those advising or assisting the trustees with scheme governance 
activities; and
4.5
n the processes the trustees have established to satisfy themselves that the person 
advising or assisting takes adequate steps to identify and assess any climate-
related risks and opportunities which are relevant to the matters on which they 
are advising or assisting.
4.2; 4.4; 4.6; 
4.7
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes

page 76
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
DWP statutory 
guidance reference
Reporting requirement
Report 
section
Strategy
92
Trustees must describe in their TCFD report:
n the time periods which the trustees have determined should comprise the short 
term, medium term and long term;
5.1.2
n the climate-related risks and opportunities relevant to the scheme over the time 
periods that the trustees have identified and the impact of these on the scheme’s 
investment strategy and, where the scheme has a funding strategy, the funding 
strategy;
5.2, 5.3, 5.4
n the most recent scenarios the trustees have used in their scenario analysis;
5.1.1
n the potential impacts on the scheme’s assets and liabilities which the trustees 
have identified in those scenarios and, if the trustees have not been able to 
obtain data to identify the potential impacts for all of the assets of the scheme, 
why this is the case;
5.3, 5.4
n the resilience of the Scheme’s investment strategy and, where the scheme has a 
funding strategy, the funding strategy, in the most recent scenarios the trustees 
have analysed; and
5.3, 5.4
n where trustees have concluded that it is not necessary to undertake new scenario 
analysis outside the mandatory cycle, the reasons for this determination.
5.1
Taskforce on Climate-related Financial Disclosure
DWP statutory 
guidance reference
Reporting requirement
Report 
section
Governance
34
To help contextualise these disclosures, trustees should concisely describe:
n how the board and any relevant sub-committees are informed about, assess and 
manage climate-related risks and opportunities and the frequency at which these 
discussions take place;
4.7
n whether they questioned and, where appropriate, challenged the information 
provided to them by others undertaking governance activities – or advising and 
assisting with governance; and,
4.2; 4.6; 4.7
n the rationale for the time and resources they spent on the governance of climate- 
related risks and opportunities.
4.7
35
Trustees should also concisely describe, in relation to those who undertake governance 
activities, or advise or assist with governance of the scheme:
n the kind of information provided to them by those persons about their 
consideration of climate-related risks and opportunities faced by the Scheme; 
and,
4.5; 4.7
n the frequency with which this information is provided.
4.5; 4.7
36
Trustees should describe the training opportunities they provided for their employees in 
relation to climate change risks and opportunities. Where trustees identified skills gaps, 
they may also describe whether they encouraged external advisers to provide training 
opportunities.
4.6
37
Trustees may wish to provide an organogram or structural diagram in their TCFD 
report, showing which groups / individual roles have responsibilities for governance of 
climate-related risks and opportunities. This may include executive officers, in-house 
teams and / or third parties engaged by the trustees. For the avoidance of doubt, there 
is no expectation that this would involve disclosing personal data of individuals.
4.5
Climate risks
in the schemes

page 77
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
DWP statutory 
guidance reference
Reporting requirement
Report 
section
Risk management
113
Trustees must describe in their TCFD report the processes they have established for 
identifying, assessing and managing climate-related risks in relation to the scheme, 
and how the processes are integrated within the trustees’ overall risk management 
of the scheme.
4, 5.1-5.4
114
The report should also include concise information on the following:
n the risk tools the trustees used and the outputs / outcomes of using those 
particular tools;
4, 5.1, 5.4.4.2
n how the trustees have identified, assessed and managed both transition and 
physical risks for the scheme, and
5.1-5.4
n how the trustees’ assessment of climate-related risks has impacted the scheme’s 
prioritisation and management of risks which pose the most significant potential 
for loss and are most likely to occur.
4, 5.3.2, 
5.4.4.1
115
Trustees should include information on how, if at all, they have used stewardship 
to help manage climate-related risks to the scheme. The TCFD provides brief 
supplemental guidance on engagement activity and risk.
6.4
116
Disclosing information about how climate-related opportunities are identified, assessed 
and managed is encouraged as this will add further insights for members and others 
into the Scheme’s overall approach to climate-related risk. 
5.4.5
Taskforce on Climate-related Financial Disclosure
DWP statutory 
guidance reference
Reporting requirement
Report 
section
Strategy
93
Trustees should also describe in their TCFD report: 
n their reasons for choosing the scenarios they have used; and 
5.1.1
n the key assumptions for the scenarios used and the key limitations of 
the modelling (for example, material simplifications or known under/over 
estimations); and 
5.1.1, 5.3, 5.4
n any issues with the data or its analysis which have limited the comprehensiveness 
of their assessment (see section on “as far as they are able” at Part 2 of the 
Statutory Guidance, paragraphs 1 to 11 above)
5.1.1, 5.3, 
5.4.2, 5.4.3
94
Trustees may include information in their TCFD report on any other aspects of the 
assessment of their investment strategy and, if they have one, funding strategy and 
scenario analysis that they consider would be helpful to disclose.
n/a
Climate risks
in the schemes

page 78
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
DWP statutory 
guidance reference
Reporting requirement
Report 
section
Metrics and targets
182
If trustees believe that it is not meaningful, in relation to any metric, to aggregate data 
across certain asset classes, they should not do so, but should instead report at the 
most aggregated level which remains meaningful (for example at asset class level). If 
this approach is necessary, they should also report the proportions of the scheme assets 
associated with each reported metric (in the above example, the proportion of the 
portfolio represented by each asset class).
6.2
183
Trustees may choose to disclose some or all of their chosen metrics against a relevant 
benchmark to identify the relative performance of the portfolio.
n/a
193
Trustees must describe in their TCFD report the target they have set, and the 
performance of the scheme against the target.
6.1, 6.2
194
Trustees should report concisely on the steps they are taking to achieve the target 
or targets.
6.3, 6.4
195
Trustees should provide a concise description of the methodology used to measure 
performance against the target or targets, including any estimations relied upon in 
measuring progress.
6.1
196
Where trustees have replaced a target, they should briefly explain why. Similarly, where 
a target has been missed, trustees should offer a brief explanation. Such explanations 
could help savers and others understand the trustees’ conclusions on the events or 
circumstances that made the target unachievable or not in members’ interests.
n/a
Taskforce on Climate-related Financial Disclosure
DWP statutory 
guidance reference
Reporting requirement
Report 
section
Metrics and targets
175
Trustees must describe in their TCFD report the metrics which they have calculated – 
absolute emissions metric, emissions intensity metric, portfolio alignment metric and an 
additional climate change metric. If they have been unable to obtain data to calculate 
the metrics for all of the assets of their scheme, they must explain why this is the case.
6.1
176
When disclosing their portfolio alignment metric, trustees should describe the key 
components of the methodology (for example, key judgements, assumptions, data 
inputs and where relevant how the chosen methodology accounts for data gaps) used 
to calculate their chosen metric. 
5.4, 6.1, 6.2
177
If the trustees have chosen to use a metric which is not recommended in this 
Guidance, they should explain why. 
n/a
178
For all metrics, trustees should concisely explain their methodologies and those of any 
asset managers or third party service providers used, and their rationale for taking the 
approach that has been adopted. 
6.1
179
When reporting total GHG emissions and Carbon Footprint, trustees should report the 
proportion of assets for which data was available. Trustees should concisely explain 
where data was estimated, and should indicate any assumptions that have been made 
that could impact significantly on the results. Where they have data of uncertain 
quality, trustees should again concisely explain this.
6.1
180
Where trustees report metrics on only a proportion of the portfolio, they should explain 
the proportion on which they are reporting.
6.1
181
When reporting total GHG emissions and Carbon Footprint, trustees should set out 
the Scope 1 and Scope 2 emissions of assets separately from the Scope 3 emissions 
of assets for each DB section and each popular DC arrangement. Trustees may 
additionally report the Scope 1 and Scope 2 emissions of assets separately. Emissions 
should be reported in amount of CO2 equivalent (CO2e). 
6.2
Climate risks
in the schemes

Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Appendix B: Further information in relation 
to selected climate metrics
Total Greenhouse Gas Emissions (GHG)
What is it?
This metric measures the total greenhouse gas emissions attributable to a portfolio. Trustees are recommended to report this 
number, covering at least scopes 1 and 2 GHGs.
Equation
Equation in plain English
To calculate this metric, you assess the proportion of a company you own, let’s say 1%. Then you work out the company’s 
annual GHG emissions, let’s say 100 tonnes of CO2e. Then you apportion yourself your share of the company’s emissions, 
in this case 1 tonne of CO2e. You repeat this exercise for all the companies in the portfolio, and add up all the apportioned 
emissions. 
Advantages over other metrics
Potential drawbacks
Simple to calculate
No normalisation between funds. The larger the investor, the 
larger the total emissions figure
Easy to communicate
Difficult to translate into exposure to climate risk
Enables trustees to set a baseline for climate action and to 
understand the climate impact of their investments
Might not be decision-useful
Carbon footprint
What is it?
Also referred to as financed emissions, this is the most common measure of portfolio carbon footprint. The interpretation of 
the metric is ‘the amount of GHGs emitted for each £m invested in the portfolio’. Considering public equities and public fixed 
income, Railpen’s carbon footprint was c.70 tonnes GHGs per £m invested at the end of 2020. Trustees are recommended to 
report this metric.
Equation
Equation in plain English
To calculate this metric, you follow the same steps as for Total Greenhouse Gas Emissions (see left), then divide by your 
total AUM in £m.
Advantages over other metrics
Potential drawbacks
Can be used to compare asset classes and portfolios to one 
another and to a benchmark 
Uses a scheme’s proportional share of equity and debt – 
an increase in share prices, all else equal, would result in a 
decrease in the scheme’s total emissions
Using the portfolio market value to normalise data is fairly 
intuitive to investors
Metric does not effectively account for differences in carbon 
efficiency across companies which are vastly different in size
Metric allows for portfolio decomposition and attribution 
analysis
page 79
∑i
n
value of investment
enterprise value incl. cashi
∑Assets under management
* (scope 1 + scope 2 GHGs)i )
(
value of investment
∑
enterprise value incl. cashi
i
n
* (scope 1 + scope 2 GHGs)i )
(
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes

Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Portfolio alignment metric: Proportion of portfolio invested in companies aligned to net zero 
What is it?
Portfolio alignment metrics provide a forward-looking metric that can be applied to a wide range of industries, companies and 
asset classes. Such metrics estimate expected future emissions associated with a given investment portfolio, fund or investment 
strategy. Portfolio alignment disclosure using binary targets can help trustees make a forward-looking assessment of an asset 
owner portfolio and overall investment strategy.
Equation
Equation in plain English
To calculate this metric, you need to assess the ‘alignment’ status (i.e. alignment to a net-zero outcome) of each portfolio 
company. Then you need to add the weights of the companies categorised as either ‘aligning’ or ‘fully aligned’. 
Advantages over other metrics
Potential drawbacks
Lack of widely available, high quality, historical climate-related 
information, creates the need for forward-looking metrics
Simple metric
Addressing the increasing regulatory expectations, looking to 
provide a forward-looking assessment 
Further work will be needed to improve forward 
looking quality
Portfolio alignment metric allows for a simple representation 
of status across portfolios and incorporate ongoing changes 
in company alignment through engagement and climate data 
developments
Proportion of portfolio where companies are being engaged on climate issues (process-based metric)
What is it?
Engagement is a key route through which trustees can reduce their exposure to climate change risk. The investments they 
make give them not just voting rights but significant influence over the direction of a company. Asset managers should be 
using this influence to manage the scheme’s exposure to climate change risks and opportunities, highlighting any concerns 
about the direction of a firm during engagement activity that they undertake. This metric allows a trustee to assess the extent 
to which an asset manager is prioritising engagement and/or voting on the topic of climate change. Selection of this metric is 
recommended in the Pensions Climate Risk Industry Group’s (PCRIG) definition of best practice.
Equation
Equation in plain English
To calculate this metric, you need to identify all companies in the portfolio being engaged on climate change. Then you need to 
add the weights of the companies that are under engagement.
Advantages over other metrics
Potential drawbacks
Does not require company-disclosed climate data
Binary measure of engagement with no measure of influence 
on company direction
Useful for monitoring asset managers
Can be subject to ‘greenwashing’
page 80
∑Weight of portfolio companies being engaged on climate change
∑Weight of portfolio companies assessed as ‘aligning’ or ‘fully aligned’
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes

page 81
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Appendix C: MSCI disclaimer
This disclosure was developed using information from 
MSCI ESG Research LLC or its affiliates or information 
providers. Although Railpen’s information providers, 
including without limitation, MSCI ESG Research LLC 
and its affiliates (the ‘ESG Parties’), obtain information 
(the ‘Information’) from sources they consider reliable, 
none of the ESG Parties warrants or guarantees the 
originality, accuracy and/or completeness, of any data 
herein and expressly disclaim all express or implied 
warranties, including those of merchantability and 
fitness for a particular purpose. The Information 
may only be used for your internal use, may not be 
reproduced or redisseminated in any form and may not 
be used as a basis for, or a component of, any financial 
instruments or products or indices. Further, none of the 
Information can in and of itself be used to determine 
which securities to buy or sell or when to buy or sell 
them. None of the ESG Parties shall have any liability 
for any errors or omissions in connection with any 
data herein, or any liability for any direct, indirect, 
special, punitive, consequential or any other damages 
(including lost profits) even if notified of the possibility 
of such damages.
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes

page 82
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Appendix D: Principles for effective disclosures
#
Principle
1
Disclosures should present relevant information specific to the potential impact of climate-related risks and opportunities 
on the scheme avoiding generic or boilerplate disclosures that do not add value to members’ understanding of issues. 
2
Disclosures should be specific and sufficiently complete to provide a thorough overview of the scheme’s exposure to 
potential climate-related impacts and the trustees’ governance, strategy and processes for managing climate-related risks 
and opportunities. 
3
Disclosures should be clear and understandable showing an appropriate balance between qualitative and quantitative 
information. 
4
Disclosures should be consistent over time to enable scheme members to understand the development and/or evolution 
of the impact of climate-related issues on the scheme. 
5
Disclosures should ideally be comparable with other pension funds of a similar size and type. 
6
Disclosures should be reliable, verifiable and objective. 
7
Disclosures should be provided on a timely basis. The TCFD recommends annual disclosures for organisations. 
Taskforce on Climate-related Financial Disclosure
Source: Adapted from the TCFD Final Report, Annex: Implementing the Recommendations of the TCFD (June 2017) 
‘Appendix 3: Fundamental Principles of Effective Disclosure’ (Page 51).
Climate risks
in the schemes

page 83
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Appendix E: GHG metrics by section
Taskforce on Climate-related Financial Disclosure
Total GHG 
emissions64 
(tCO2e)
Carbon 
footprint 
(tCO2e/£m 
invested)
Data quality: 
reported GHG 
data (%)        
Data quality: 
estimated GHG 
data (%) 
Data quality: 
unavailable GHG 
data (%)
Total Scope 3 GHG 
emissions
(tCO2e)
Scope 3 carbon 
footprint 
(tCO2e/£m 
invested)
Scope 3 Data 
quality: reported 
+ estimated GHG 
data (%)
RPS63
1994 Pensioners
84,288
73 
56
21
22
665,439
591
75
Abellio
582
59
48
21
31
4,427
462
67
Abellio East Midlands
14,197 
59
48
21
31
107,986
462
67
AECOM
675
59
48
21
31
5,135 
462
67
Alpha Trains
49
59
48
21
31
370
462
67
Alstom Railways
3,462 
58
68
22
10
33,661
576
88
Alstom Signalling 
700
59
48
21
31
5,327 
462
67
Alstom UK
1,301 
59
48
21
31
9,899
462
67
Alstom UK C2C
224
59
48
21
31
1,702
462
67
Alstom UK SIgnal
642
52
62
26
13
6,068
500
85
AMCO
13 
59
48
21
31
96
462
67
Angel Trains
1,963
59
48
21
31
14,943
462
67
Anglia Railways
4,214 
59
48
21
31
32,051
462
67
AtkinsRéalis
5,068 
59
48
21
31
38,550
462
67
AtkinsRéalis Rail & Transit
1,569 
59
48
21
31
11,932
462
67
ATOC Limited
1,822 
59
48
21
31
13,860
462
67
Climate risks
in the schemes

page 84
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Taskforce on Climate-related Financial Disclosure
Total GHG 
emissions64 
(tCO2e)
Carbon 
footprint 
(tCO2e/£m 
invested)
Data quality: 
reported GHG data 
(%)        
Data quality: 
estimated GHG 
data (%) 
Data quality: 
unavailable GHG 
data (%)
Total Scope 3 GHG 
emissions
(tCO2e)
Scope 3 carbon 
footprint 
(tCO2e/£m 
invested)
Scope 3 data 
quality: reported 
+ estimated GHG 
data (%)
RPS63
Atos
7,018
61
57
20
23
60,544
538
75
Babcock Rail Ltd
3,237
59
48
21
31
24,617
462
67
Balfour Beatty
3,387 
59
48
21
31
25,765
462
67
BAM Nuttall
6
59
48
21
31
43
462
67
BR
2,687
59
48
21
31
20,438
462
67
British Transport Police
7,073 
59
48
21
31
53,798
462
67
BT
83
59
48
21
31
635
462
67
BUPA Occupational Health
96 
59
48
21
31
730
462
67
Caledonian Sleeper
392 
59
48
21
31
2,984
462
67
Carlisle Cleaning Services
13 
59
48
21
31
97
462
67
Chiltern Railway Company Limited (Maintenance)
1,163 
59
48
21
31
8,847
462
67
Clientlogic
18
59
48
21
31
137
462
67
Colas Rail
2,386
59
48
21
31
18,148
462
67
Crossrail
1,767
59
48
21
31
13,443
462
67
CSC Computer Sciences
17 
59
48
21
31
133
462
67
DB Cargo (UK) Limited
25,939
59
63
21
16
241,124
561
82
East Coast Main Line
22,194
59
48
21
31
168,806
462
67
Eurostar
13,828 
59
48
21
31
105,176
462
67
Eversholt Rail Limited
357 
59
48
21
31
2,713
462
67
Climate risks
in the schemes

page 85
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes
Total GHG 
emissions64 
(tCO2e)
Carbon 
footprint 
(tCO2e/£m 
invested)
Data quality: 
reported GHG 
data (%)        
Data quality: 
estimated GHG 
data (%) 
Data quality: 
unavailable GHG 
data (%)
Total Scope 3 GHG 
emissions
(tCO2e)
Scope 3 carbon 
footprint 
(tCO2e/£m 
invested)
Scope 3 data 
quality: reported 
+ estimated GHG 
data (%)
RPS63
First Great Western
41,022 
59
48
21
31
312,014
462
67
Freightliner
9,621
59
48
21
31
73,178
462
67
GB Railfreight
1,191
59
48
21
31
9,060
462
67
Gemini Rail Services
63
59
48
21
31
477
462
67
Global Crossing
607
59
48
21
31
4,615
462
67
Govia Thameslink Railway
19,197
59
48
21
31
146,015
462
67
Govia Thameslink Railway (Southern & Gatwick Express)
29,441
59
48
21
31
223,993
462
67
Great Eastern Railway
9,193
59
48
21
31
69,921
462
67
Hitachi Rail Europe
1,163
59
48
21
31
8,850
462
67
HS1
111
59
48
21
31
842
462
67
Hull Trains
324
59
48
21
31
2,467
462
67
Intelenet Global BPO (UK) Limited
1
59
48
21
31
11
462
67
Island Line
328
59
48
21
31
2,496
462
67
ISS Transport Services
32
59
48
21
31
241
462
67
Jacobs UK
817
59
48
21
31
6,216
462
67
London Eastern Railway (West Anglia)
4,308
59
48
21
31
32,766
462
67
London Overground
8,545
59
48
21
31
64,995
462
67
London Underground
46
59
48
21
31
348
462
67
MITIE Facilities Services
3
59
48
21
31
20
462
67

page 86
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes
Total GHG 
emissions64 
(tCO2e)
Carbon 
footprint 
(tCO2e/£m 
invested)
Data quality: 
reported GHG 
data (%)        
Data quality: 
estimated GHG 
data (%) 
Data quality: 
unavailable GHG 
data (%)
Total Scope 3 GHG 
emissions
(tCO2e)
Scope 3 carbon 
footprint 
(tCO2e/£m 
invested)
Scope 3 data 
quality: reported 
+ estimated GHG 
data (%)
RPS63
Merseyrail
7,815
59
48
21
31
59,440
462
67
MTR Elizabeth Line
3,476
59
48
21
31
26,442
462
67
National Express Services Limited
36
59
48
21
31
276
462
67
Network Rail
240,134
59
48
21
31
1,826,471
462
67
New Cross Country
16,722
59
48
21
31
127,190
462
67
Northern (ex North East)
22,624
59
48
21
31
172,080
462
67
Northern (ex North West)
19,850
59
48
21
31
150,983
462
67
Omnibus
184
63
70
19
11
1,789
624
87
Porterbrook
1,203
59
48
21
31
9,147
462
67
QJump
48
59
48
21
31
365
462
67
Rail Gourmet UK Limited
362
59
48
21
31
2,755
462
67
Railpen
2,419
59
48
21
31
18,399
462
67
Resonate Group (Link)
452
59
48
21
31
3,441
462
67
Resonate Group (Rail)
877
59
48
21
31
6,671
462
67
Resonate Group (TCI)
323
59
48
21
31
2,456
462
67
RSSB
2,618
59
48
21
31
19,914
462
67
Scotrail
30,667
59
48
21
31
233,258
462
67
SE Trains Limited
32,060
59
48
21
31
243,851
462
67
SERCO
762
59
48
21
31
5,794
462
67

page 87
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes
Total GHG 
emissions64 
(tCO2e)
Carbon 
footprint 
(tCO2e/£m 
invested)
Data quality: 
reported GHG 
data (%)        
Data quality: 
estimated GHG 
data (%) 
Data quality: 
unavailable GHG 
data (%)
Total Scope 3 GHG 
emissions
(tCO2e)
Scope 3 carbon 
footprint 
(tCO2e/£m 
invested)
Scope 3 data 
quality: reported 
+ estimated GHG 
data (%)
RPS63
Siemens
108
59
48
21
31
819
462
67
Socotec UK Limited
113
59
48
21
31
857
462
67
South Western Railway
36,475
59
48
21
31
277,431
462
67
Specialist Computer Centres
26
59
48
21
31
199
462
67
Stadler Greater Anglia
85
59
48
21
31
646
462
67
Stadler Rail
254
59
48
21
31
1,931
462
67
Swirl Service Group
1
63
73
19
8
10
642
90
Systra Ltd
1,321
59
48
21
31
10,051
462
67
Thales Information Systems
54
59
48
21
31
413
462
67
Thales Transport and Security
3,891
59
48
21
31
29,591
462
67
The Chiltern Railway Company Limited
6,147
59
48
21
31
46,755
462
67
The QSS Group Limited
146
59
48
21
31
1,110
462
67
Torrent Trackside Limited
15
59
48
21
31
111
462
67
TransPennine Express (Former Arriva Trains Northern)
4,610
59
48
21
31
35,063
462
67
TransPennine Express (Former North Western Trains)
2,823
59
48
21
31
21,470
462
67
Transport for Wales
81
59
48
21
31
616
462
67
Transport for Wales (Rail)
15,274
59
48
21
31
116,172
462
67
Trenitalia c2c
4,725
59
48
21
31
35,942
462
67
Unipart Rail – NRS 
1,373
59
48
21
31
10,445
462
67

page 88
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes
63	 As per explanation in section 6.1, these data include the two strategies introduced in 2023. 
Some data may not sum to 100% given rounding. 
64	 GHG scopes 1 and 2; Source: Bloomberg; MSCI (please see Appendix C for disclaimer)
Total GHG 
emissions64 
(tCO2e)
Carbon 
footprint 
(tCO2e/£m 
invested)
Data quality: 
reported GHG 
data (%)        
Data quality: 
estimated GHG 
data (%) 
Data quality: 
unavailable GHG 
data (%)
Total Scope 3 GHG 
emissions
(tCO2e)
Scope 3 carbon 
footprint 
(tCO2e/£m 
invested)
Scope 3 data 
quality: reported 
+ estimated GHG 
data (%)
RPS63
Unipart Rail – Railpart 
1,094
59
48
21
31
8,324
462
67
Unisys
37
59
48
21
31
281
462
67
UPS
45
59
48
21
31
341
462
67
Voith
48
59
48
21
31
365
462
67
Wabtec Rail Limited
23
59
48
21
31
171
462
67
West Coast Partnership
27,699
59
48
21
31
210,680
462
67
West Coast Traincare
4,135
55
65
24
11
39,601
540
86
West Midlands Trains
20,752
59
48
21
31
157,839
462
67
Westinghouse Rail Systems
3,303
59
48
21
31
25,127
462
67
Worldline IT Services UK Limited
892
59
48
21
31
6,786
462
67

page 89
Chair’s 
message
About this 
report
Member 
summary
Climate
change
Climate
governance
Metrics and 
targets
Glossary
Appendices
Taskforce on Climate-related Financial Disclosure
Climate risks
in the schemes
Total GHG 
emissions67 
(tCO2e)
Carbon 
footprint 
(tCO2e/£m 
invested)
Data quality: 
reported GHG 
data (%)        
Data quality: 
estimated GHG 
data (%) 
Data quality: 
unavailable GHG 
data (%)
Total Scope 3 GHG 
emissions
(tCO2e)
Scope 3 carbon 
footprint 
(tCO2e/£m 
invested)
Scope 3 data 
quality: reported 
+ estimated GHG 
data (%)
BTPFSF 65, 66
BT Police 1970
38,177
59
48
21
31
290,380
462
67
BRSF 68
BR Superannuation Fund
4,497
72
56
21
22
35,473
588
75
65	 As per explanation in section 6.1, these data include the two strategies introduced in 2023.
66	 The table does not include BT Police 1968 as they no longer invest in the Growth Pooled 
Fund and therefore the data coverage would be zero based on the scope of this report.
67	 GHG Scopes 1 and 2; Source: Bloomberg; MSCI (please see Appendix C for disclaimer).
68	 As per explanation in section 6.1, these data include the two strategies introduced in 2023.

Taskforce on Climate-related Financial Disclosure
	 100 Liverpool Street, London, EC2M 2AT
	 contactus@railpen.com