Pension funds have a role to play in contributing to sustainable development, local economic resilience and improving transport and other types of infrastructure, the London Pensions Fund Authority (LPFA) has said.

The comments were made as LPFA published its first 'Investing in the UK' report in collaboration with The Good Economy and Local Pensions Partnership Investments, outlining its real estate and infrastructure investments.

This showed that LPFA has invested around 13 per cent of its total portfolio in local communities around the UK.

Of the £1.7bn invested in infrastructure and real estate, around 64 per cent was in the UK, with 70 per cent of investments outside of London.

This includes an offshore windfarm powering over 1m homes, 114 commercial real estate properties that provide an estimated 19,000 jobs, and 24 housing projects including build-to-rent, student, and affordable housing.

In total, real estate and infrastructure make up 9.5 per cent and 12.2 per cent, respectively, of the LPFA’s £7.7bn fund, or around £1.7bn.

However, the project focuses on UK-based investments only which make up around 64 per cent of the LPFA’s total infrastructure and real estate investments, representing about £1bn in value.

LPFA CEO, Robert Branagh, said: “Understanding where our physical investments are is good risk management, particularly as the impact of climate change becomes more pronounced.

“It is important that we move to a low carbon economy and that this is done in a way that is as fair and inclusive as possible to everyone concerned, creating decent work opportunities and leaving no-one behind.

"We know that it is important that we move to a low carbon economy and that this is done in a way that is as fair and inclusive as possible to everyone concerned, creating decent work opportunities and leaving no-one behind.

"Pension Funds have a role to play in contributing to sustainable development, in enhancing local economic resilience in London where we are based and across the UK, in supporting business growth and job creation and improving transport and other types of infrastructure."

However, Branagh emphasised that "it’s important that we understand what is already taking place so that we can make informed decisions about the future".

In addition to the new report, the LPFA announced that it will also be launching an interactive map where stakeholders can see how the fund is investing across the UK and how they are supporting the UK’s development.

"Our members want to know how their pension is invested and we support their desire for transparency," LPFA head of communications and engagement, Alistair Peck, stated.

"In 2022, we linked up with Tumelo to launch our transparency dashboard on our website which shows what listed equity investments we have. This is around 50 per cent of our total fund.

"When the results of this project are online, our members and stakeholders will be able to see where over 70 per cent of our fund is invested.”

The LPFA also recently shared its net zero progress report showing that it has made "good progress" in its net-zero journey.

---