The London Pensions Fund Authority (LPFA) has announced it will allocate 3% of its £8bn (€9.3bn) portfolio into environmental solutions assets.
The £250m investment will go into a newly launched private markets fund focused on global decarbonisation efforts.
The LPFA’s assets are managed alongside those of Lancashire County Pension Fund and the Royal County of Berkshire Pension Fund through the £27bn Local Pensions Partnership Investments (LPPI) investment pool.
LPPI said last week that, on the basis of discussions with these funds about a strategic asset allocation to the new climate solutions fund, it is targeting an initial commitment of £500m.
Upcoming target
The allocation to the new LPPI fund comes as the LPFA, which in 2021 committed to being a net zero fund by 2050, prepares to announce a climate solutions target. This is required under the Institutional Investors Group on Climate Change’s (IIGCC) Net Zero Investment Framework, which LPFA is using to guide its path to net zero.
Following the publication of the IIGCC’s Climate Solutions Guidance and working closely with LPPI, the LPFA said it has been able to take steps towards setting a climate solutions target, which it will announce in due course.
Jo Donnelly, chief executive officer of LPFA, said: “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.
“Our net zero commitment means engaging with our existing investment managers to reduce portfolio emissions while also backing companies that support the transition to a low-carbon future.”
The LPPI climate solutions fund is an open-ended solution that aims to invest in private market assets that contribute towards climate mitigation, climate adaptation, and the protection, restoration, and sustainable management of nature.
It is LPPI’s eighth pooled fund, coming alongside global equities, fixed income, infrastructure, real estate, private equity, credit, and alternatives.
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Krystle is IPE’s London-based senior reporter and splits her time reporting between IPE and its sister publication Impact Investor.
Before joining IPE Krystle worked as a financial journalist covering investment trends, and ESG. She was highly commended at the Headline Money Awards for Rising Star of the Year (B2B financial journalism).
She previously worked as a regional breaking news reporter for a daily newspaper.View full Profile
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