The London Pension Fund Authority (LPFA) has its commitment to bring carbon emissions across the LPFA fund to a target based net-zero goal by 2050, with interim goals set for 2030.
As part of this project, LPFA will adopt the Paris Aligned Investment Initiative Net Zero Asset Owner Commitment in line with the Institutional Investors Group on Climate Change (IIGCG) Net Zero Investment Framework.
This provides investors with a common framework to support a journey to net-zero emissions and encourages contributions towards meeting the Pars Agreement’s objectives.
Those who sign up to the asset owner commitment must publish their action plan within 12 months.
The move is part of LPFA’s overall objective to manage the financial risks and opportunities posed by climate change.
LPFA is making good progress. By 31 March 2021, only 0.6% of the fund’s listed equities investments were in traditional energy companies such as oil, gas or extractive fossil fuel companies compared to 3.2% for the MSCI All Countries World Index benchmark. Of those investments, 91% by value were assessed by the Transition Pathway Initiative as factoring climate change into their operational decision-making.
LPFA is also investing in assets which contribute to a lower carbon future with 2.7% of the whole portfolio identified as “green”.