The London Pensions Fund Authority (LPFA), an £8 billion (US$10.23 billion) local government pension scheme, will invest £250 million in environmental solutions assets that will support members’ net zero ambitions. Local Pensions Partnership Investments (LPPI), which makes day-to-day investment decisions on the LPFA’s behalf, 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 it affects all investments. In 2021, the LPFA committed to being a net zero fund by 2050, using the Institutional Investors Group on Climate Change’s (IIGCC) Net Zero Investment Framework. 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, such as renewable energy, energy efficiency or nature-based solutions, like reforestation. The LPFA said it 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 taken steps towards setting a climate solutions target which it will announce in due course. “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,” said Jo Donnelly, CEO of the LPFA. “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.”
