LPFA commits fund to net zero goal by 2050

London Pensions Fund Authority (LPFA) has committed to bring carbon emissions across the LPFA Fund to a target-based net zero goal by 2050 and to set up an interim target for 2030.

The organisation said that, in order to aid it in achieving this goal, it would adopt the Paris Aligned Investment Initiative Net Zero Asset Owner Commitment in line with the Institutional Investors Group on Climate Change (IIGCC) Net Zero Investment Framework.

LPFA said the fund had already made substantial progress reducing the risk associated with climate change, pointing out that only 0.6 per cent of its investments in listed equities were in traditional energy companies as of 31 March 2021, well below the 3.2 per cent on the MSCI All Countries World Index benchmark.

Additionally, 91 per cent of these investments were assessed by the Transition Pathway Initiative as factoring climate change into their operational decision-making.

Meanwhile, the organisation said it was investing in assets which contribute to a lower carbon future and pointed out that 2.7 per cent of the whole portfolio was identified as “green”.

LPFA CEO, Robert Branagh, said: “Climate change poses a material risk to society, business and so to our investments. As a responsible investor, it’s our duty to mitigate these risks. We’ve made significant progress decarbonizing our portfolio to date following the introduction of climate change policy in 2017.

“Working closely with our delegated asset manager, Local Pensions Partnerships Investments, we will be developing our net zero action plan over the coming 12 months. More information will be published when that process is complete.”

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