WE'RE COMMITTING TO NET ZERO

The Fund has made substantial progress reducing the risk associated with climate change and in February 2022, we announced that we no longer held any extractive fossil fuel holdings in the Fund's global equities portfolio.

Prior to that, as at 31 March 2021, only 0.6% of the Fund’s investments in listed equities were in traditional energy companies (i.e. Oil and Gas or Extractive Fossil Fuel companies). This compared to 3.2% for the MSCI All Countries World Index benchmark. Of these investments, 91% (by value) were assessed by the Transition Pathway Initiative as factoring climate change into their operational decision-making. The carbon intensity of the Fund’s listed equities portfolio is in decline, with an ongoing trend of reduction seen since annual monitoring commenced in December 2018.

LPFA is also investing in assets which contribute to a lower carbon future with 2.7% of the whole portfolio identified as “Green”.

This is a commitment to transition our investments to achieve net zero portfolio greenhouse gas emissions by 2050, or sooner. Among other activities, this can involve:

• setting interim objectives and targets to reduce emissions on the way to 2050,
• engaging with companies, asset managers, and others to ensure that their activities are consistent with achieving global net zero emissions by 2050 or sooner
• setting a target and reducing our operational emissions.

Further details of how we intend to achieve the commitment will be explained in a Climate Action Plan which, as required by the IIGCC commitment, will be published within 12 months.

The IIGCC is a membership body of over 300 asset management companies and pension funds across Europe. It has created the Net Zero Investment Framework (NZIF) to help investors reach net zero. Net zero is a new challenge for all of us and, in line with LPFA strategic intent, collaboration will be important to us in reaching our goal. Each investor will reach net zero in their own way, but frameworks and guidance can help to ensure real progress is made. The NZIF includes a range of guidance including how to tackle lack of data on carbon emissions, metrics which can be used for some of the assets we invest in (sovereign bonds, corporate bonds and real estate), insights on engaging with companies to encourage their move to a low carbon future and content on investing to drive change.

You can find out more about the IIGCC framework here.

In December 2021, LPFA undertook a survey of our suppliers to understand how they are aligned with our net zero ambitions. It’s important to the LPFA that our net zero ambitions are supported by our partners. The table below summarises our main suppliers and identifies if the organisation has their own targets.

This is very much a starting point for us and we will continue to engage with our suppliers to support their move to net zero and evolve our own supply chain governance.

More information about the LPFA's approach to climate change and responsible investment can be found below.

• Our climate change policy
• Our progress against climate change policy report animation 
• Our progress against climate change policy report
• Our responsible Investment policy

If you are interested in finding out more about climate change, you might like: 

• NASA’s Climate Change site 
• The Mayor of London’s Climate Change section 
• London Councils Climate Change page 
• The United Nations Climate Change page