The London Pensions Fund Authority (LPFA) has published its plan to reach net zero, committing to reduce the fund’s Scope 1 and 2 emissions by 75 per cent by 2030.

According to the plan, the fund’s immediate attention will be on moving their listed equity holdings, which represent around 50 per cent of the fund at around £3.8bn, towards net zero supported by an extensive engagement campaign.

This is in line with the fund's new commitment to ensure that at least 32 per cent of its listed equities investments in material sectors meet the criteria to be considered aligning to net zero by 2025, and by 55 per cent by 2030.

It also committed to ensuring that at least 70 per cent of financed emissions in material sectors resulting from their listed equities exposure are either assessed as net zero, aligned with a net-zero pathway, or the subject of direct or collective engagement and stewardship.

In addition to this, the LPFA has committed to three portfolio goals, including reducing its Scope 1 and 2 portfolio level emissions intensity by 75 per cent, maintaining a portfolio that is consistent with the Paris Agreement, and investing in assets that help the global economy go net zero.

However, the LPFA have not set a goal for the percentage of assets to be invested in climate solutions at this stage because of the lack of available data, confirming that it expects to set a percentage goal for investment in climate solutions during 2023.

More broadly, the LFPA also committed to reducing the emissions from running the fund, committing to reduce the Scope 1 and 2 emissions by 50 per cent per full time employee by 2030.

LPFA CEO, Robert Branagh, commented: “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. However, 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.”

LPFA director of funding and risk, Peter Ballard, added: “Our plan is about supporting the greening the planet and the fund.

"We want to drive change in the real world so that the economy as a whole achieves net-zero emissions.

"This means that we’ll work closely with our delegated asset manager, LPPI, and collaborate with like-minded investors to make sure that we are pushing companies along their own net-zero path. This is new ground for many of us and we’ll be using our website to report on our progress as clearly as we can.”

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