The Wales Pension Partnership (WPP) has launched a new decarbonisation initiative across the £2.5bn of its global equity assets managed by Russell Investments.

The pool for Welsh Local Government Pension Scheme (LGPS) funds is targeting a reduction in both the carbon footprint and fossil fuel reserves exposure of its global equity mandate by 25 per cent, relative to its MSCI All Country World Index benchmark.

To meet its decarbonisation targets, WPP said it was utilising Russell Investments’ Enhanced Portfolio Implementation (EPI) infrastructure through Link Fund Solutions.

EPI leverages a centralised trading and portfolio management process with Russell Investments responsible for executing the investment strategies of the WPP’s underlying fund managers.

Using the framework, the WPP said it would be able to benefit from greater control and customisation around decarbonisation and other ESG-related objectives.

“Climate change not only poses significant challenges for society; it also represents a financial risk for our constituent authorities and scheme members,” commented WPP Joint Governance Committee chair, Glyn Caron.

“By reducing the carbon exposure within our active equity assets, in partnership with Russell Investments, we are seeking to address these challenges. We see this as a positive first step in meeting our long-term sustainability goals.”

Russell Investments managing director, UK institutional and Middle East, Jim Leggate, added: “Issues around climate change and the transition to a low carbon economy are increasingly critical issues that institutional asset owners are seeking to address.

“We are pleased to support the WPP in their carbon reduction objective as part of a wider framework designed to reflect the evolving needs of their members.

“Through our EPI framework, we are well positioned to deliver a holistic, efficient and low-cost customised solution that evolves with the combined long-term sustainability goals of the WPP’s constituent authorities.”

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