LGPS Central has formally committed to transitioning its investment portfolios, with the issue of a net zero statement.

In the statement, the pool stated that since inception in 2018, it has sought to integrate environmental, social and governance (ESG) considerations, including climate change, into its investment processes, as required by its partner funds.

“It is our conviction that our responsible investment activities are fundamental to the delivery of our fiduciary responsibilities,” said the statement. “If we are to collectively limit global warming to 1.5°, the next 30 years will herald an unprecedented global transformation of the real economy and investment markets. This transformation will result in an even stronger focus on ESG integration, climate risk management and stewardship, to both fulfil fiduciary responsibilities and to accelerate the transition to a low carbon economy.”

LGPS Central benchmarks its portfolios – both internally and externally managed – against the Institutional Investor Group on Climate Change’s (IIGCC) Net Zero Investment Framework to achieve net zero emissions by 2050, or sooner.

The initial focus will be on listed equities, corporate bonds, sovereign bonds and real estate with an interim 50% target on greenhouse gases set for 2030 across equity and fixed income portfolios. The focus will extend to other asset classes as reliable data becomes available.

“We will challenge corporate management on their reporting of GHG emissions, their strategies, and activities to reduce emissions, their use of off-sets and their lobbying activity,” said LGPS Central.

“We will escalate concerns where necessary and use our voting rights accordingly. A commitment to achieving net zero is not a replacement for robust ESG analysis and we will continue to have high expectations of our external managers and expect our investment portfolios to reflect this detailed scrutiny.”

The commitment was made with the full support of the pool’s eight partner funds.


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Published: February 1, 2022
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