LGPS Central, the asset pool for nine Midlands-based asset managers with combined assets of around £40 billion, has joined an initiative which will look at how investors can align their portfolios to the goals of the Paris Agreement on global warming action.
The initiative, launched by the Institutional Investors Group on Climate Change (IIGCC), aims to develop a common understanding of the concepts relating to agreement with the Paris Agreement. LGPS Central director of responsible investment and engagement, Michael Marshall, commented: “If implemented, the Paris Agreement will introduce risks and opportunities to institutional investors. Many investors have considered aligning their portfolios to the Paris climate accord, but unfortunately there is no agreed framework for what this means in practice. The IIGCC’s initiative is vital for asset owners to understand their portfolio’s impact on a changing climate, and the impact of a changing climate on their portfolios.”
With many pension funds now facing up to the risks of climate change and increasing commitments to low carbon assets, there is growing interest in supporting the objectives of the Paris agreement, according to LGPS Central. The steering committee for the initiative includes other major European investors, including Brunel Pension Partnership, Church of England Pensions Board, AP2, PKA and TPT Retirement Solutions.