LPFA allocates 3% to Environmental Opportunities
- Fund’s c.£250 million strategic asset allocation will be invested by LPPI in their Environmental Opportunities Fund
- Major step forward for the LPFA in meeting their IIGCC climate solutions target
London, 8 April 2025
The London Pensions Fund Authority (LPFA), an Administering Authority and £8 billion Local Government Pension Scheme (LGPS) fund with over 100,000 members, has committed to investing around £250 million, or 3%, of its £8 bn Fund1 value in environmental solutions assets that will support their net zero ambitions. LPPI (Local Pensions Partnership Investments), which makes day-to-day investment decisions on the LPFA’s behalf, under their Whole Scheme Management approach, will invest the assets into LPPI’s newly launched Environmental Opportunities Fund (EOF).
The LPFA’s Climate Change Policy identifies climate risk as systemic, meaning that it affects all investments. As a part of putting this into action, in 2021, the LPFA committed to being a net zero Fund by 2050 and is using the Institutional Investors Group on Climate Change’s (IIGCC) Net Zero Investment Framework to guide them on their path to net zero.
As part of that commitment, signatories are required to publish a target for investment in ‘climate solutions’, which refers to technologies and businesses that mitigate and adapt to climate change, whether renewable energy, energy efficiency or nature-based solutions, like reforestation.
The LPFA has made steady progress on the six net zero goals originally published in 2022. Following the publication of the IIGCC’s Climate Solutions Guidance, the Fund, working closely with LPPI as fiduciary and pool provider, has now been able to take steps towards setting a climate solutions target which it will announce in due course.
According to Jo Donnelly, CEO of the LPFA, “The impact of climate change poses a financial risk to pension funds like ours, so we’re taking climate action to protect our members’ pensions. Our net zero commitment means engaging with our existing investment managers to reduce our portfolio carbon emissions while also investing in companies that help our society transition to a low carbon future.
“We’ve worked very closely with LPPI to get to this point, and I’m delighted to see us taking such a step forward in our net zero commitment. I’m pleased that we are investing in a cleaner, greener future for our members, our society and future generations.”
Helena Threlfall, Portfolio Manager of the LPPI Environmental Opportunities Fund, said: “We have a long track record of investing in private markets. Building on this, our fund is focused on helping clients - including the LPFA - to invest in an increasing opportunity set of climate investments. The multi-asset fund complements our whole scheme management model and gives us the flexibility to consider a range of different asset types such as infrastructure, private equity, venture capital and natural capital to achieve the environmental objective of the fund.”
1 As at 31 March 2024: https://www.lpfa.org.uk/library/our-performance/annual-reports
Note to Editors
About the LPFA
The LPFA is a defined-benefit LGPS Pension Fund and Administering Authority with c.100,000 members, 115 active employers and £8 billion of assets (as of 31 March 2024). The Fund’s assets are fully pooled via LPPI together with those of the Lancashire County Pension Fund and the Royal County of Berkshire Pension Fund. The LPFA and Lancashire County Council are also shareholders of the Local Pensions Partnership which comprises LPPI and pensions administrator, LPPA. LPPA administers the LPFA Fund. The LPFA is a signatory of the Climate Action 100+, a member of the LAPFF and is a participant in the C40 Cities Divest/Invest Forum. The LPFA made a Net Zero commitment in September 2021.
About LPPI
LPPI was established in 2016 to enable UK local government and public sector schemes to pool resources and improve management of their assets for the benefit of employers and their scheme members, and currently manages £27 billion of pension assets, as of 31 December 2024.
From inception, LPPI pooled 100% of client fund assets under a Whole Scheme Management model which provides access to investments in a cost-effective manner while client funds retain sovereignty of their strategic asset allocation, investment objective and risk appetite. LPPI manages assets, allocated across a wide range of asset classes, on behalf of three pension funds: Lancashire County Pension Fund, the London Pensions Fund Authority and the Royal County of Berkshire Pension Fund.
LPPI is authorised and regulated by the Financial Conduct Authority (FRN: 724653). LPPI is a signatory to the UK Stewardship Code, the United Nations’ Principles for Responsible Investment (PRI), the IIGCC Net Zero Asset Manager initiative, the Asset Owner Diversity Charter, Climate Action 100+, Nature Action 100, and other investor initiatives and standards. Visit http://www.lppi.co.uk for more information.
Contact us
For further information, please contact Alistair Peck or Evelina Miller on communications@lpfa.org.uk