Our approach to sustainability.

As one of the UK’s largest pension funds with more than £10bn in assets, we know that how and where we invest matters. Investing sustainably is not only good for the planet and our society, but it’s good for the financial health of the Scheme too.

Environmental, Social and Governance (ESG) factors have been a key part of our investment process for more than a decade. It informs our investment strategy and where we allocate funds, the mandates we agree with investment managers and the ongoing monitoring of their performance.

We know that choosing investments where ESG is considered are more likely to perform well over a long period and helps reduce risk. This plays an important part in providing security to members’ pensions.

But we can, and should, strive to do more to help shape a better future.

In 2021, we established an ESG Committee (ESGC) to accelerate progress towards achieving our goals and being at the forefront of good practice in sustainable investment. The ESGC is responsible for exploring the opportunities and risks within ESG and making recommendations to the Trustee Board.

We’ve also committed to a target of reaching net zero by 2040 for the Scheme. This means making sure that we don’t release more carbon into the atmosphere than we take out of it. M&S has chosen the same net zero target. We’re working together to share knowledge and resources, so that we can both make our net zero targets.

Our ESG mission is not something we can do alone; engaging with our advisers, suppliers and appointed investment managers will be important to making this a reality.

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

Find out more about our work on sustainability.

For more information about our work on sustainability, you can read the Climate Change Report or visit our sustainable investments section.

2022 Climate Change Report

2023 Climate Change Report

More about sustainable investments

When we need to provide information to meet our legal duties, we often need to use jargon that can be difficult to understand. You can read an explanation for many of the technical words we use in our ESG documents in the Glossary.

What we've achieved.

What we’re aiming for.

Our long-term target is to provide the ongoing security of the Scheme, reach net zero by 2040 and support better outcomes for everyone. We believe that we can achieve these things and have started work on measuring our impact on the climate and the impact climate change will have on the Scheme. The results of this analysis are in our first Climate Change Report which shows the Scheme’s carbon emissions and looks at how we’ll manage the risks that climate change present.

The main risks to the Scheme from climate change are those that come from societal and economic changes as part of the switch to a low carbon economy (transition risks) and those that come from the physical effects of climate change (such as higher temperatures and more extreme weather). To manage the transition risks we will need to pay attention to how and where we invest the Scheme’s assets.

The physical risks are harder to assess as they will likely take place over a longer period and be influenced by the global response to the climate emergency. We will still seek to manage these risks and play our part in minimising them by working towards our net zero target.

As well as managing the risks to the Scheme from climate change, we want to positively impact the world and mitigate the worst effects of climate breakdown through sustainable investing and reducing our own Scheme emissions.

Our target of net zero by 2040 provides us with a challenging plan to work towards. Actively encouraging the businesses we work with to support this target will be important in reaching this goal and we know that as a large pension scheme we can use our influence to support wider change.

What you can do.

Making the Scheme net zero means looking at the carbon produced by everything we do to run the Scheme and working out how we can reduce or remove it (for example by switching to renewable energy) or offset it (for example by funding tree planting). This includes the carbon produced by sending out letters and interacting with members. You can play a part in helping with this, by opting to receive your communications digitally – you just need to register for the M&S Pension Scheme Portal to have your preference updated automatically.

If you have AVCs in the M&S AVC Scheme with Legal and General, or other defined contribution pension savings – where you can elect where the funds are invested – you can choose to take ESG issues into consideration. For details of the investment options for the M&S AVC Scheme, go to Manage Your Account.

ESG explained

To help you understand more about what we mean when we're talking about ESG and to answer some questions you may have, read our FAQ page.