Local Government Pension Scheme (LGPS) funds with 2030 net-zero targets may find this goal “incredibly difficult” to achieve while meeting their fiduciary responsibilities, according to Pensions for Purpose founder and chair, Karen Shackleton.

Speaking at the PLSA Local Authority (LA) Conference, Shackleton said she was “concerned” for the funds that are publicly setting net-zero targets that are more ambitious that by 2050.

“I think that will be incredibly difficult to achieve whilst still delivering to the fiduciary responsibility of paying pensions,” she stated.

“All you can do is has a very clear statement of what you are doing and why, and how you are going to be measuring success yourself. If that means being a bit more conservative in terms of what people expect to achieve, then I think that’s probably a good thing.”

During the session, attendees were asked whether their fund had committed to net zero-aligned investing.

More than a quarter (28 per cent) said they had set a 2050 target, while the same proportion (28 per cent) said that they had set a target for earlier than 2050.

Nealy half (43 per cent) were ‘thinking about it’, while 2 per cent said they were not committing as there were too many challenges.

Also speaking at the session, Abrdn head of sustainability insights and climate change strategy, Eva Cairns, identified “a number of challenges” with LGPS funds meeting net-zero targets.

“The first one: The world is not on that net-zero 2050 trajectory,” she stated.

“We try to look at what is the most likely outcome, and that is a 2.4 degree world, it’s not a 1.5 degree world. Despite all commitments and promises, emissions are still increasing.”

Cairns also noted that data gaps were still considerable, particularly for smaller companies, emerging markets and Scope 3 emissions.

Portfolio alignment was also identified as a challenge, alongside ‘broadening horizons’ – the understanding that it cannot just be about net zero by 2050, but that the social impacts and biodiversity need to be considered for a ‘just transition’.

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