Obligations to consider climate risk in relation to the investments of the BAE Systems Main Scheme

ClientEarth warns the BAE Systems Main Scheme trustees that ignoring climate risk could lead to legal challenges for breach of fiduciary duty. The letter outlines material financial risks associated with fossil fuels, the opportunities of a low-carbon transition, and emerging market standards among OECD asset owners. It provides a detailed set of recommended actions, including reallocating capital away from coal and high-risk fossil fuels, adopting TCFD-aligned reporting, and pursuing active stewardship of portfolio companies.

• Trustees of the BAE Systems Main Scheme have a legal obligation to act in the best interests of members, which includes considering climate change as a material investment risk for both the scheme's assets and its sponsor.
• Fossil fuel assets, particularly coal, are highly exposed to climate risks; 54% of EU coal power assets already have negative cash flow, a figure expected to reach 97% by 2030.
• Current financial analysis often fails to price climate risk correctly because it relies on short-term forecasts (1 to 3 years) and suffers from a lack of available company data.
• A review of 30 OECD asset owners (excluding the US) indicates that 67% have divestment policies in place, and investors representing USD 6 trillion in assets have committed to divesting from fossil fuels.
• ClientEarth recommends that the scheme cease new investments in coal and high-risk fossil fuel assets, such as arctic exploration, tar sands, and ultra-deep-water drilling.

APA

ClientEarth (2018). Obligations to consider climate risk in relation to the investments of the BAE Systems Main Scheme. https://www.clientearth.org/media/rqhi4i04/bae-systems-main-scheme-legal-letter-ce-en.pdf

Chicago

ClientEarth. Obligations to consider climate risk in relation to the investments of the BAE Systems Main Scheme. 2018. https://www.clientearth.org/media/rqhi4i04/bae-systems-main-scheme-legal-letter-ce-en.pdf.

Wikipedia

{{cite press release |author=ClientEarth |title=Obligations to consider climate risk in relation to the investments of the BAE Systems Main Scheme |date=10 August 2018 |url=https://www.clientearth.org/media/rqhi4i04/bae-systems-main-scheme-legal-letter-ce-en.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{clientearth2018obligations, author = {{ClientEarth}}, title = {{Obligations to consider climate risk in relation to the investments of the BAE Systems Main Scheme}}, publisher = {ClientEarth}, year = {2018}, month = aug, url = {https://www.clientearth.org/media/rqhi4i04/bae-systems-main-scheme-legal-letter-ce-en.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }