LPFA launches net zero action plan with 2030 emissions target

November 3, 2022

The London Pensions Fund Authority (LPFA) has outlined how it plans to meet its members’ expectations by becoming a net zero organisation.

The £7.6 billion local government fund has pledged to reduce its direct Scope 1 and indirect Scope 2 greenhouse gas emissions by 75 percent by 2030.

The LPFA’s new Investor Climate Action Plan (ICAP) also explains how they will bid to tackle the financial risks posed by climate change.

Read Minerva's previous coverage of net zero in the UK:

https://www.old.manifest.co.uk/ccc-uk-at-risk-of-missing-net-zero/

It says it aims to ‘drive real-world change’ by engaging with companies making the largest contribution to the financed emissions across the fund.

Immediate attention will be given to moving their listed equity holdings - which account for about half of the fund - towards net zero through an ‘extensive engagement campaign’.

It says the ICAP has been developed using the Paris Aligned Investment Initiative (PAII) framework, something the LPFA signed up to when it made a net zero commitment in September 2021.

The PAII is a collaborative investor-led global forum enabling investors to align their portfolios and activities to the goals of the Paris Agreement.

The LPFA announced in February 2022 that it no longer holds any extractive fossil fuel holdings in its global equity portfolio, and CEO Robert Branagh says the fund is at the start of a sustainability drive they intend to see through.

He added: “Climate change poses a risk to society, businesses, our assets, and ultimately our ability to pay pensions.

“It is an issue of significant concern for our members and wider stakeholders but the transition to a net zero global economy also presents us with sustainable investment opportunities.

“I’m proud of the progress that the LPFA has made in setting clear targets and publishing a realistic, science-based net zero plan.

“But we know that there is more that we need to do and we will be announcing more details on areas like climate solutions in due course.”

The LPFA is a member of the Department of Work and Pensions Occupational Pensions Stewardship council, a group urged by pensions minister, Guy Opperman, to lead the way to net zero in the next five to ten years.