On the go: The £4.3bn Environment Agency Pension Fund is ahead of its target to cut emissions exposure to coal, oil and gas, according to its new stewardship report.
As sister title MandateWire reported last year, the fund is nearly five years ahead of its goal to reach net zero by 2045.
According to the Environment Agency fund’s stewardship code report, the fund is also ahead of its target to reduce exposure to future emissions, by 95 per cent for coal and 90 per cent for oil and gas by 2025, compared with the exposure in its underlying benchmark as at March 31 2015.
During 2021, it lowered its exposure to future emissions by 99 per cent for coal and 98 per cent for oil and gas, compared with 2015.
The fund is working towards its target to have 17 per cent of its portfolio invested in assets that tackle climate change directly by 2025. In 2021, it invested 10 per cent of its portfolio in this direction, compared with 9 per cent in the previous year.
The pension fund noted that 26 per cent of its investments during 2021 were in sustainable assets, including in the areas of energy efficiency, alternative energy, water and waste treatment, public transport, property, infrastructure, and agriculture or forestry investments with low-carbon or strong sustainability criteria.
It also said that it will expand its physical climate change risk analysis into several asset classes during 2022.
Elsewhere, the fund has revealed it is addressing concerns over Federated Hermes’ sponsorship of a group of climate sceptics.
Three Danish pension fund clients of Federated Hermes, including the DKr153.5bn (£18bn) AkademikerPension, are demanding to know why the manager agreed to act as a gold sponsor for the State Financial Officers Foundation — a Republican group that has threatened to remove state pension assets from financial companies that do not support fossil fuel industries.
Climate activists targeted a local government pensions conference in September over its association with Federated Hermes. It is understood that the manager is terminating its sponsorship of the SFOF.
The Environment Agency fund told MandateWire that it is addressing concerns relating to Federated Hermes through its LGPS pool, Brunel Pension Partnership, which employs EOS at Federated Hermes as the partnership’s engagement adviser. The pension fund has more than 50 per cent of its assets invested through the £38bn Brunel pool.
This article first appeared on MandateWire.com
