The West Yorkshire Pension Fund (WYPF) has confirmed that its 2025 actuarial valuation report will include a more sophisticated assessment of climate impact, as concerns around the climate modelling used by the fund continue to grow ahead of COP30.
 
Analysis shared with Pensions Age by the Fossil Free WYPF campaign group warned that WYPF is understating the economic consequences of climate impacts and may not adequately capture climate risks, and therefore financial risk.
 
Carbon Tracker Initiative founder, Mark Campanale, explained that the weaknesses in the modelling could lead to poor investment outcomes, as it suggests that the returns would continue to perform adequately even in a +4 °C climate scenario, with a +5.6 per cent rate of return. 
 
However, the campaign group pointed out that climate scientists have previously said that a +4 °C global warming would have "severe consequences", and that passing climate tipping points will likely make it harder, if not impossible, to reverse this process.  

Given this, Campanale argued that the idea that the economy would continue to grow under these circumstances or that financial markets would generate positive returns, "strains credibility given current climate science".

“Using modelling that forecasts pensions performing well at +4C raises questions about whether WYPF is adequately protecting members’ financial interests and the long-term performance of the pension fund," Campanale said.

"The idea that the economy continues to grow at high levels of warming trivialises the clear evidence from the scientific community.  The longer we delay climate action, the more the risks to the fund and its beneficiaries build up.

"This will have serious negative consequences for the ability of the scheme to fund future benefits and is basic Stern climate economics 101.” 
 
These concerns have also been echoed by some local MPs and Councillors, with Labour MP for Leeds Central and Headingley, Alex Sobel, agreeing that "the projections of likely temperature rises and potential consequences to pension income that WYPF is using seem inadequate and questionable".

"With advice like this, is WYPF considering the threat of stranded assets from its fossil fuel investments?" Sobel queried.

Adding to this, Green Party councillor for Gipton and Harehills, Leeds, and deputy leader of the Green Party, Mothin Ali, said, “If the pension fund is seriously underestimating the climate risk faced by the world, it may not be fulfilling its fiduciary duty to its members.

"To protect the long-term security of the pension fund, some alternative and reliable climate risk advice is urgently needed."
 
However, WYPF Advisory Panel chair, and councillor, Andrew Thornton, stressed that this is an issue the fund is aware of and looking to address, stating: "WYPF is well aware that early iterations of climate scenario analysis grossly simplified and potentially underestimate the potential impact of climate change and this and other limitations are clearly acknowledged in the WYPF Climate Report to which Fossil Fuel WYPF refer.

“Work in this area continues to evolve and the WYPF 2025 actuarial valuation report will include a more sophisticated assessment.”

Broader calls for action also persist, however, as Fossil Free WYPF has been calling on the fund to not only improve climate modelling, but to divest from its fossil fuel investments for over 10 years.

And the impetus for this change to be seen sooner rather than later has grown amid broader Local Government Pension Scheme (LGPS) reforms, as Cllr Ali stated: "I support calls for full divestment from fossil fuels - to protect WYPF from climate risk and stranded assets - before March 2026, when West Yorkshire may lose some of its democratic accountability as it merges with other funds in the Northern Pool.”
 

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