UK pension funds Transport for London and Avon set net zero targets

The Transport for London pension fund aims to cut carbon emissions by more than half by 2030 and fully by 2045, the £ 13bn ($ 17.8bn) fund announced on October 1 .

The directors of the pension fund said in the statement that the net carbon reduction strategy “is arguably the most important development in the sustainability of the fund to date.” Directors said they started measuring the carbon footprint of the companies it owns as a result of the 2016 Paris Agreement. This has led to a policy of excluding coal and at least 15% of the company’s assets. funds in ESG investments.

The latest decision to reduce carbon emissions by 55% no later than 2030 and 100% from a 2016 baseline no later than 2045 applies to all of the fund’s assets and “plays an important role in the long-term value creation of the fund’s investment portfolio, “the statement said.

The goal of net zero by 2045 is ambitious, the directors said, but “fully consistent” with their fiduciary responsibility to generate returns for the long-term financial health of the fund.

Separately, Avon Pension Fund, Bristol, England, said on Monday that new climate change targets call for reducing absolute emissions from equity portfolios by 43% by 2025 and 69% by 2030, for compared to its benchmark emissions for 2020.

The £ 5 billion local government pension fund said in a press release that it expected to be net zero by 2050.

Avon will transform its £ 780million low-carbon equity portfolio strategy into a new Paris-aligned benchmark developed by FTSE Russell and Brunel Pension Partnership. The index is designed to reward companies generating green revenues and aligned with the goals of the Paris Agreement.

Avon said in the statement that by investing in PAB, the fund is expected to achieve annual emissions reductions of at least 7%.

The pension fund will reduce its allocation to emerging markets due to the challenge of managing the financial risk of climate change, while in developed markets where most of its capital is allocated, “it can exert greater influence”, a- he declared. The pension fund has also made significant progress in reducing emissions by working with the Brunel Pension Partnership, ClimateAction 100+ and Institutional Investors Group on Climate Change.

Brunel Pension Partnership’s IT director David Vickers said in the Avon statement that the new Paris-aligned indices “provide the industry with new tools to implement the Paris Agreement. We call on investors to use it quickly. benchmarks in their quest to support climate transition. “

Pension fund managers could not be reached immediately for further information.

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