South Yorkshire to accelerate portfolio decarbonisation

South Yorkshire Pensions Authority (SYPA) has revealed its plans for future investment that focuses on supporting a move to a lower carbon economy and that helps to achieve its net zero goals.

SYPA has aimed to be net zero by 2030 and is considering a mix of investment options that could include negative carbon investments such as timber or renewable energy sources.

It will also look for alternatives to some existing investments which have more explicit climate risk objectives as well as delivering the returns required to pay pensions.

SYPA sees climate change as the single biggest risk to the value of its investment assets and value of its pension promises.

The significant improved investment in funding encouraged the authority to consider a proposed new strategy at its March meeting.

The strategy proposes moving money out of traditional equity and fixed income investments (shares and bonds), and into increased allocations for natural capital – in particular timber and forestry – renewable energy and climate opportunities investing in technologies that support the move to a low carbon economy.

The fund will seek to support a Just Transition to a low carbon economy, while asking its asset managers to increase pressure on companies to implement clear plans to decarbonise their operations.