The pension committee for the London-based Camden Pension Fund has agreed to move its investment in the London CIV Global Alpha Growth sub-fund (core fund) to a greener investment, placing its assets in a Paris-aligned sub-fund instead.

Both sub-funds are offered by the UK pool and managed by the same asset manager – Baillie Gifford – however the Paris-aligned sub-fund claims to have a lower carbon footprint.

Councillor Rishi Madlani, chair of the pension committee, said: “The fund has agreed to move to a new product which has a 43% lower carbon footprint than the current mandate and aims to decarbonise by 7% per annum. This is in-line with the intergovernmental panel on climate change’s 1.5°C degree warming scenario.”

The decision follows a review by consultancy isio in June, which showed that the LCIV Paris-Aligned Global Alpha fund retains all of the attractive features (team, philosophy and process, and performance objective) of the core fund with the additional sustainable focus on minimising greenhouse gas intensity aligning well with the Camden’s priority UN Sustainable Development Goals (SDGs) framework and in particular SDG 13 (Climate Action).

This decision further excludes fossil fuel extraction companies from the scheme’s portfolio and aligns it closer to the Paris agreement, Madlani said.

The London CIV has confirmed that there will be no difference in manager fees between the Paris-aligned fund and the core fund. Baillie Gifford’s original mandate was worth around £432m (€509m).

When the Paris-aligned sub-fund was launched in May, the London CIV claimed that two of its local authority client pension funds had made an investment worth £485m.

Camden has also recently completed a £271m move to a Legal & General Investment Management passive equity product called the Future World Fund which reduces its carbon footprint and enhances ESG issues, which better aligns with the scheme’s investment beliefs whilst delivering market returns, Madlani added.

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