The Strathclyde Pension Fund has identified the 10 biggest contributors to its equity portfolio’s carbon footprint and pledged to engage with them as shareholders, according to documents from its most recent board meeting.

The £18.7bn (€22.2bn) fund also plans to discuss carbon output with one of its asset managers, Oldfield Partners.

Oldfield’s mandate accounted for 45% of Strathclyde’s active equity carbon emissions at the end of March, despite making up just 10.5% of the pension scheme’s active equity allocation.

It also holds the two most carbon-intensive companies identified in the assessment.

However, in aggregate, the carbon footprint of Strathclyde’s equity portfolio was 7% lower than that of the MSCI All Country World Index.

The carbon footprint assessment “provides a basis for targeted climate change engagement”, wrote pension fund director Richard McIndoe in a report to the board.

In his report, McIndoe said stock selection by the fund’s active managers had improved carbon efficiency of the overall portfolio but that this was offset by sector allocation.

“Carbon efficiency,” McIndoe wrote, “is impacted by an overweight allocation and weak stock selection in the carbon-heavy construction and materials sector, and the fund’s underweight position in banks does not capitalise on this sector’s low-carbon credentials.”

However, direct exposure to oil and gas “contributes a net reduction in carbon intensity through sector allocation and stock selection”, he added.

Passive mandates were, on aggregate, 9.6% less carbon-intensive than the benchmark.

Strathclyde has considered allocations to passive low-carbon products but decided against investing due to a lack of track records for FTSE and MSCI products, as well as concerns about complexity and costs.

More than 60% of Strathclyde’s portfolio was invested in active and passive listed equity at the end of October.

In addition, Strathclyde’s board agreed to sign up to the Institutional Investors Group on Climate Change, having identified it as “the most appropriate” of the industry bodies it considered, “given its exclusive focus on climate change issues”.

Strathclyde will be the 13th UK public pension – and the first from Scotland – to join the group, which consists of asset owners and managers from across Europe.

Meanwhile, the fund also awarded an emerging market debt mandate to Ashmore.

The pension fund tendered the mandate earlier this year and intends to allocate 1.5% of its portfolio to Ashmore, equivalent to roughly £280m based on the funds value at the end of October.

Strathclyde posted a third-quarter return of 7.4%.

In the first three quarters of the year, the fund gained 22.4%.