The Hertfordshire Local Government Pension Scheme Local Pension Board recently published its “Agenda Reports & Other Papers” on November 7, 2025.
Pension Fund Statement of Accounts Update
The Pension Fund’s net assets available to fund benefits as of March 31, 2025, were reported at £6,403 million in the draft accounts published on June 30, 2025. Since then, updated Investment Manager Valuations have increased this value by £7.8 million to £6,411 million. This adjustment includes a £4.6 million increase from Pantheon’s updated financial statements and a £3.2 million increase from infrastructure manager Macquarie’s updated financial statements. KPMG is expected to complete field-testing work by the end of October 2025. (Agenda Pack Page 21)
Decarbonization Progress in Listed Equities and Corporate Bonds
The Pension Fund’s responsible investment report, provided by Mercer, analyzes the Fund’s decarbonization progress as of March 31, 2025. The analysis covers listed equities and corporate bond strategies, representing 60% of the Fund’s assets where Scope 1 and 2 emissions data is available. The listed equity portfolio’s Carbon Footprint (Scope 1 + 2) is approximately 27.6% more efficient than the wider market (MSCI ACWI). From 2020 to 2025, the listed equity portfolio’s Carbon Footprint decreased by approximately 19.3%. While this is currently behind the IPCC decarbonization pathway, the Fund achieved a 12.4% reduction in the last year. Decisions by the Pensions Committee to allocate to Osmosis Core Equity, Robeco Quality Equity, and increase exposure to UBS Climate Aware have resulted in greater exposure to green revenues. The corporate bonds portfolio’s Carbon Footprint (Scope 1 + 2) has decreased by approximately 23.3% since the March 31, 2022 baseline, placing the Fund ahead of the IPCC decarbonization pathway for this asset class, despite no specific targets being set yet. (Agenda Pack Page 61-62, 70, 73, 75)
Manager Appointments and Allocation Changes for Decarbonization
In fiscal year 2025, the Pensions Committee made several decisions to reduce the Fund’s carbon footprint and realign with decarbonization targets. These included disinvesting £600 million from UBS passive global equities and investing £400 million in the UBS Climate Aware Fund, £100 million in Storebrand’s Global ESG Plus Strategy, and £100 million in Osmosis Resource Efficient Core Equity Strategy. The planned £100 million investment with Storebrand did not materialize due to issues with the Investment Manager agreeing to terms with the ACCESS pool operator, Waystone. Consequently, this £100 million was transferred from UBS regional passive equity to the UBS Climate Aware mandate as part of the annual rebalancing. (Agenda Pack Page 62)
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