Brunel Pension Partnership transfers over £3bn into Paris-aligned benchmark series

Brunel Pension Partnership has transferred more than £3bn from five pension fund clients to the new Paris-Aligned Benchmark (PAB) series, developed in coordination with FTSE Russell.

The five client pension funds were Wiltshire Pension Fund, Oxfordshire Pension Fund, Environment Agency Pension Fund, Devon Pension Fund, and Avon Pension Fund.

The PAB forms a core element of the partnership’s collective commitment to reach net zero, and will harness data across a range of climate factors to provide a climate-linked tilt exposure.

It meets the minimum requirements of the EU’s Paris-aligned benchmark criteria by achieving a 50 per cent reduction in carbon emissions over a 10-year period, and also integrates forward-looking metrics and governance protections from the Transition Pathway Initiative (TPI).

The passive equity fund adopting the new benchmarks is managed by Legal & General Investment Management (LGIM), with the the Brunel transition believed to be one of the largest passive fund launches in LGIM history, in terms of assets under management.

Brunel Pension Partnership chief responsible investment officer, Faith Ward, highlighted the transition as an indication of how indices can be a major part of the solution to climate change.

“Crucially, these indices harness the data we already have, including forward-looking metric, not least TPI metrics," she continued. "But they are also flexible enough to change in the future, as the data continues to improve.”

Wiltshire Pension Fund Committee chair, Councillor Richard Britton, added: “We are very aware that responding to climate change is important to our scheme members, and we are fully committed to taking action against this risk in order to safeguard the fund’s investments.

“Working collaboratively with our partner funds and the Brunel pool, we are proud to have helped develop a forward-thinking, cost-effective strategy to help us meet our carbon reduction goals.”

Adding to this, Devon Pension Fund chairman of the investment and pensions fund committee, Councillor James Morrish, said: “The Devon Fund – which provides pensions to tens of thousands individuals and their families across the public sector – will now be tracking companies that share our ambitions to achieve net-zero carbon, as quickly as possible.

“It will significantly reduce the fund’s exposure to fossil fuel companies, such as Shell and BP, and will also support companies transitioning their businesses in line with the objectives of the Paris Agreement on Climate Change.”

Also commenting on the transition, Environment Agency Pension Fund chair of pensions committee, Robert Gould, commented: “When the Environment Agency Pension Fund set its net zero target of 2045, we made Paris-aligned benchmarks a central part of that. The days of investors blindly following the market are gone.

“We are delighted that Brunel has delivered our needs into such a sophisticated index, factoring in climate solutions, year on year carbon reductions and using TPI data to align to a low carbon economy. This index will revolutionise passive investing and we are delighted to be part of a partnership driving such positive change in the market.”

Oxfordshire Pension Fund
and Avon Pension Fund previously announced the plans to move to the Paris-Aligned Benchmark (PAB) as part of their broader net zero commitments earlier this month.

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