London Pensions Fund Authority sets 2030 climate investment target
The London Pensions Fund Authority (LPFA) has committed to an initial goal of investing a total of 5% in climate solutions by 2030.
Coming to approximately £400 million, the figure is based on the £150 million it currently has in climate solution, alongside an additional £250 million announced earlier this year.
The move comes as part of its obligation to set a climate solutions target as part of its work with the Institutional Investor Group on Climate Change (IIGCC)’s Net Zero Investment Framework (NZIF).
LPFA CEO Jo Donnelly said: “Net zero is a strategic priority for us and investing in climate solutions is a vital part of that strategy. It’s about ensuring that we invest in opportunities that help us pay members their pensions when they retire.
“We are pleased to be able to commit to a goal combining existing investments and a specific allocation to Environmental Opportunities. Fund investments do evolve, of course, but we are clear about the opportunities that exist in a low carbon future.”
LPFA Responsible Investment Manager, Paul Hewitt, added: “To set this initial goal, we’ve used current IIGCC guidance to identify existing listed equity and corporate fixed income assets that can be described as climate solutions. We’ve then built on that to reach the full 5% goal.
“It’s worth pointing out that, currently, there is no guidance on what Infrastructure or Real Estate asset can be classed as a climate solution. This means, that our actual investments in this area are likely to be much higher.
“For example, through our investment in GLIL, we’re invested in projects like Hornsea 1, one of Europe’s largest windfarms. While 5% is a great start, we’ll be revising our targets as more guidance is issued and as the climate solutions market evolves.”
The economic benefit of net zero was recently highlighted in report by the UK’s Confederation of British Industry, which found that – between 2023 and 2024 – the [net zero economy] sector grew 10.1% and now generates £83.1 billion in Gross Value Added.
Of this, £28.8 billion came directly from net zero businesses and £54.3 billion from supply chain activities and broader economic contributions.
This robust performance, according to the LPFA, underscores the sector’s multiplier effect – with every £1 of value generated by the net zero economy creating an additional £1.89 in the wider economy.
