3 November 2022
The London Pensions Fund Authority (LPFA) has today published their Investor Climate Action Plan (ICAP) outlining how the £7.6 billion Fund plans to go net zero and tackle the financial risks posed by climate change. The Fund has set 6 goals covering the portfolio, their assets and the Fund’s operations. The Fund’s immediate attention will be on moving their listed equity holdings towards net zero supported by an extensive engagement campaign. Listed equities represents 50% of the Fund, or around £3.8 billion.
The LPFA’s plan has been developed using the Paris Aligned Investment Initiative (PAII) framework to which the LPFA signed up in September 2021. The PAII is a collaborative investor-led global forum enabling investors to align their portfolios and activities to the goals of the Paris Agreement.
Robert Branagh, LPFA’s CEO said, “Climate change poses a risk to society, businesses, our assets, and ultimately, our ability to pay pensions. It is an issue of significant concern for our members and wider stakeholders but the transition to a net zero global economy also presents us with sustainable investment opportunities. I’m proud of the progress that the LPFA has made in setting clear targets and publishing a realistic, science-based net zero plan. However, we know that there is more that we need to do and we will be announcing more details on areas like climate solutions in due course.”
In their ICAP, the LPFA commits to:
3 Portfolio goals:
2 Asset goals:
1 Operational goal:
Peter Ballard, the LPFA’s Director of Funding and Risk, led on the development of the ICAP with support from the investment consultancy firm Redington and working with LPFA’s delegated asset manager, LPPI.
He commented, “Our plan is about supporting the greening of the planet and the Fund. We want to drive change in the real world so that the economy as a whole achieves net zero emissions. This means that we’ll work closely with our delegated asset manager, LPPI, and collaborate with like-minded investors to make sure that we are pushing companies along their own net zero path. This is new ground for many of us and we’ll be using our website to report on our progress as clearly as we can.”Source: LGPS - London Pensions Fund Authority
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