Avon Pension Fund moves £700m into climate-focused investments

6 June 2023

Avon Pension Fund publishes on its website:

This week the Avon Pension Fund takes another significant step towards achieving its net zero goals.

We’ve worked with our asset manager to move over £700 million of equity investments into an innovative, Paris-aligned funding solution.

The Paris Agreement on limiting global warming forms the basis for the Fund’s climate change investment objectives.

In total, the Fund now holds over £1 billion in dedicated Paris-aligned index equity strategies and has moved away altogether from using standard market-cap indices.

Paris-aligned indices are designed to replicate investments in companies who’ve pledged to back efforts to limit global temperature rises to 1.5C. This sits alongside the Fund’s existing £575 million sustainable equity investment strategies and £400 million allocations to investments in renewable infrastructure projects such as solar farms.

One of the first LGPS to use this sustainable investment approach

Working with asset manager BlackRock, the Avon Pension Fund is one of the first Local Government Pension Schemes (LGPS) to embrace Environmental, Social and Governance (ESG) approaches through this investment mechanism.

Nathan Rollinson, Investment Manager at the Avon Pension Fund said: “This new investment will help us as we work towards our net zero goals. We’re on track to lower the carbon emissions of our equity portfolio by 2/3rd by 2030, compared with 2019.

“Avon has been a proactive responsible investor for over 20 years, and we hope this latest move will lay the foundations for other LGPS pension schemes that face the challenges posed by the transition towards a carbon neutral economy.”

Source: Avon Pension Fund
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