West Yorkshire Pension Fund looks to up climate investments

The West Yorkshire Pension Fund (WYPF) has announced plans to increase its investment in climate solutions to help meet its 2050 net-zero target, and review its level of equity holdings in the oil and gas sector.

The plans were announced alongside a broader package of developments, following a recent review of its strategic asset allocation and its investment beliefs.

In particular, the fund will be looking to help sustainable cities and communities, to support investment in sustainable transport, the building of affordable and energy efficient homes, as well as retro fitting existing housing stock and developing brown field sites.

In addition to this, the WYPF will look to review its level of equity holdings in the oil and gas sector, including an assessment of the impact of WYPF’s engagement with the sector.

Pending completion of this review, WYPF will not be increasing its holdings in listed fossil fuel stocks.

More broadly, the fund also made clear that it is not using WYPF assets to fund new fossil fuel developments, confirming that WYPF will not be lending to the oil, gas and coal sector and will continue to work with other like-minded investors to demand a similar approach from the banking industry.

Climate issues were not the only area of focus, as WYPF is also set to invest in UK’s economic growth driving decent work to support greater investment in innovation and infrastructure to address today’s challenges and creating better job opportunities for all.

Commenting on the changes, WYPF investment advisory panel chair, Andrew Thornton, said: “WYPF’s primary responsibility is to ensure that members’ pension promises are met at an affordable and sustainable cost to employers. Investment beliefs are a crucial part of setting the fund’s asset allocation to achieve this aim and also help shape the responsible investment policy.

“Whilst all of the UN Sustainable Development Goals have clear merit, we were able to build the most coherent investment thesis around the three themes that we have chosen, which complement our work with a range of local and national partners to help drive sustainable economic growth locally and deliver a positive real-world climate impact.

“WYPF is committed to achieving net-zero emissions for our investments by 2050 and we want to see real-world transition from the companies that it invests in.

“With regards to the fossil-fuel sector in particular, as responsible and engaged investors, we wish to make clear that WYPF does not support further development and that we expect to see tangible progress being made by these companies over the next 12 months.”

The new investment strategy, including the fund's revised investment beliefs, are set to be issued for consultation with stakeholders in February 2024.

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