Local Government Pension Scheme (LGPS) fund Avon Pension Fund has brought its carbon net-zero target forward to 2045, five years earlier than initially announced.

The £5.4bn fund provides pensions for 140,000 people across Bristol, Bath and the surrounding areas.

Its announcement coincides with the publication of the fund’s annual Responsible Investment Report and was agreed following a consultation with over 5,000 members of the scheme and “extensive” local stakeholder engagement.

Avon Pension Fund already committed £400m to renewable infrastructure in 2020 and invested £2bn in climate-aligned sustainable equities between 2021 and 2023.

The fund’s Pension Committee also agreed on a new approach to investment in high-carbon companies, with the pension fund to divest from these companies unless they align with net zero by 2030.

It is also planning to achieve a 43 per cent reduction in carbon emissions by 2025 and a 69 per cent reduction by 2030.

The committee agreed to a broader coverage of fund assets within climate targets, aiming to reduce the carbon intensity of the fund’s corporate bond portfolio by 60 per cent by 2030 compared to its 2019 baseline, and set an ambition to achieve 100 per cent coverage, aligning with industry meaningful climate metrics across all asset classes.

Furthermore, Avon Pension Fund is aiming for 70 per cent of financed emissions either aligned with net zero or covered by active management in 2024, rising to 90 per cent by 2027.

The committee also revealed it was assessing how the pension fund can allocate assets to nature-based investments, such as forestry and funds targeting biodiversity, with the fund’s Investment Panel to explore the potential of such investments in 2024.

“Climate change poses the biggest risk to our planet,” commented Avon Pension Fund Committee chair, councillor Paul Crossley.

“There is no ‘Planet B’ and we can all play our part in protecting ‘Planet A’. During 2023 we consulted extensively with local councillors, staff, employers, and trade unions. We also ran a member survey which received over 5,000 responses.

“There was broad agreement among stakeholders that the Avon Pension Fund should set more ambitious climate goals and we are delighted to bring forward our net-zero target to 2045, an ambitious but achievable date. We will keep this target under regular review and will seek to accelerate further as technology and government policy develop.”

Avon Pension Fund head of pensions, Nick Dixon, added: “We believe there’s increasing convergence between financial returns and responsible investing.

“We want to seize this opportunity for the fund to achieve its objectives in a sustainable way, contributing positively to the climate transition. Our new strategy delivers a step change in our approach, focused on meaningful real-world impacts.”

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