Sustainability | Managing the Scheme | The M&S Pension Scheme

“The Scheme should be managed sustainably to create long-term value, provide security to members, and contribute to better outcomes for everybody.” Mission Statement, The ESG Committee

As one of the UK’s largest pension funds we are very aware that how and where we invest matters, and this is a responsibility that we take very seriously.

Environmental, Social and Governance (ESG) factors are a key part of our investment process. This includes our overall investment strategy and asset allocation, the design of our investment mandates, and the selection and ongoing monitoring of our investment managers.

Given how important this subject matter is, the Trustee has established an Environmental, Social, and Governance (ESG) Committee to act on its behalf. The role of the ESG Committee is to explore the opportunities and risks within ESG and to make recommendations to the Trustee Board.

Our approach to ESG includes not only how we invest scheme assets but how we set policies on running the Scheme and how we engage with our suppliers.

The Scheme’s purpose is to ultimately provide security to its members. We firmly believe investing responsibly supports long term value, reduces risk, and contributes towards better outcomes for everyone.

What does ESG stand for?

ESG stands for Environmental, Social and Governance and is used to provide a picture of an investment or a company’s standards towards sustainability, equality and corporate fairness.

What is the Scheme’s approach to ESG and responsible investment?

Our approach to ESG and responsible investment is supported by three pillars

Security

The Scheme’s primary concern in setting its investment strategy is to act in the best financial interests of its members, and the investment strategy is formulated to support its primary objective of paying member benefits as and when they fall due.

Sustainability

The Trustee recognises that it has a responsibility to protect the planet and make sure the decisions it makes today don’t compromise the payment of pensions to members in the future.

Stewardship

Stewardship is the responsible allocation, management and oversight of the companies and assets that we invest in, leading to sustainable benefits for the economy, environment, and society.

What is the impact of climate change on the M&S Pension Scheme?

As one of the UK’s largest pension schemes, the Trustee of the Marks & Spencer Pension Scheme supports the importance of establishing sustainable investment principles that tackle climate change and support the delivery of a net zero future.

M&S has recently announced its commitment to be fully net zero by 2040. The Trustee is keen to align the pension scheme with the company’s climate ambition and we expect to announce our carbon reduction targets before the start of our next financial year. In the meantime, with the support of expert advisors, we plan to build on the sustainable investments we have already implemented.

We are currently reviewing our greenhouse gas emissions and carbon footprint to meet with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and will be reporting these findings next year, alongside interim and long-term targets to rapidly reduce emissions associated with our portfolio.

More information

Further details on the Scheme's approach to responsible investment is available in the Statement of Investment Principles as Appendix B on page 67 of the Trustee Annual Report & Accounts.