On the go: London CIV, which oversees around £26bn on behalf of 32 London Local Government Pension Scheme funds worth a collective £45bn, has launched its Passive Equity Progressive Paris Aligned Fund.
State Street Global Advisors was appointed to implement the index and manage the fund, which follows the launch of an active equity fund aligned to the objectives of the Paris Agreement in May.
The fund launched on December 1 with £520m seed investment from the £875m London Borough of Havering Pension Fund and the £1.6bn London Borough of Lewisham Pension Fund.
The objective of the fund is to track the performance of the S&P Developed Ex-Korea LargeMidCap Net-Zero 2050 Paris-Aligned ESG Index. The index is based on the wider S&P Developed Ex-Korea LargeMidCap Index, which is representative of large and mid-cap securities in global developed equity markets (excluding Korea).
The index measures the performance of eligible equity securities from the wider index, selected and weighted to be collectively compatible with a 1.5C global warming climate scenario and aims to meet the requirements of the EU Paris-Aligned Benchmark standard.
It is also updated in line with any changes to the minimum standards of Paris-aligned benchmarks and uses underlying climate datasets, methodologies and ESG products.
Additionally, it is based on a number of forward-looking metrics, incorporating factors that seek to manage transition risk, physical risk and climate change opportunities in line with the recommendations of the Task Force on Climate-related Financial Disclosures.
Stewardship is a critical part of the fund’s core strategy. For voting, London CIV will consolidate all its votes in the fund, set key priorities at a high level while working together with client funds’ priorities and the Local Authority Pension Fund Forum’s guidelines.
Jacqueline Amy Jackson, head of responsible investment at the pool, said: “We are delighted to launch a further Paris-aligned LCIV fund that aligns with a 1.5C trajectory towards net zero emissions. This takes the amount of assets under management by the London CIV in Paris-aligned strategies to £1.9bn.”
She noted that the fund “will not only play a critical role in meeting our ambitious net zero targets, but it will also support our duty as investors to finance the low-carbon transition”.
“Reducing climate change risk is a key priority for our client funds and many of them have already set their own net zero targets. This fund will support them in delivering these important objectives,” she added.
This article originally appeared on MandateWire.com
