LGPS Central has launched a new net zero strategy to build on the commitments it had made in 2022 to achieve net zero scope 1 and 2 carbon equivalent financed emissions by 2050 or sooner for listed equities, corporate bonds, sovereign debt and property.
The commitments made last year also included a 50% reduction in financed emissions by 2030 for listed equities and corporate bonds.
The strategy, published on the pool’s website, outlines the rationale for its belief in creating a “realistic pathway for achieving net zero”. It includes a series of interim milestones across a range of assets, detailing both the current position and the milestones that must be achieved.
With the backdrop of recent government policy changes, the pool responsible for £55bn in total assets, said that it remains focused upon the milestones laid out within the strategy and will continue to “engage to influence responsible investment policy”.
The framework for the strategy was construed based on the Net Zero Investment Framework established by the Institutional Investors Group on Climate Change, the pool stated.
It added that numerous industry guidance documents, including the Target Setting Protocol provided by the UN-convened Net-Zero Asset Owner Alliance, were consulted to employ appropriate climate methodologies and formulate innovative criteria for their engagement and alignment targets.
LGPS Central said that a key milestone that shaped target selection was the ambition to add the carbon foot printing of private market assets to its existing climate risk monitoring service by 2025.
The achievement of this target will ensure that the pool can track the financed emissions of its entire pooled assets in 2026, it stated.
The pool added that carbon footprints are also a key consideration in the selection of portfolio companies for stewardship programmes in both public and private markets.
With the new strategy, LGPS Central said it remains “totally committed” to its 2050 targets.
Patrick O’Hara, director of responsible investment and engagement at LGPS Central, said: “Our commitment to net zero is intrinsically linked to our organisational objectives.”
O’Hara added that the strategy is aligned to LGPS Central’s stewardship strategy and outlines a “practical pathway to achieving our targets”.
LGPS Central will continue to engage with portfolio companies to improve their net zero strategies and performance as “we believe it is the best way to achieve real-world decarbonisation”, O’Hara added.
“We will continue to communicate progress to our partner funds via our innovative and ever-evolving Climate Risk Monitoring Service,” he said.
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