LPFA pushes for net-zero, consultants form new ESG initiative

London Pensions Fund Authority commits to net-zero by 2050

Several pension funds have joined the Paris Aligned Investment Initiative, adding a further 12 asset owners to the group’s existing 28 signatories. Among them are the UK-based London Pensions Fund Authority, RPMI Railpen and Tesco Pension Investment. The new additions bring members up to 40, with combined assets under management of $2.35tn (£2tn). In addition to the UK signatories are several from the Nordic countries, the US and Australia, including Ilmarinen, Elo Mutual Insurance Company, AP Pension, AP3, AP7, Lægernes Pension, PenSam, the Church Pension Fund and Hesta. All member investors will push for investment into climate solutions, and commit to achieving net-zero portfolio emissions by 2050 or sooner. They will also support investors to align their activities and portfolios with the goals of the Paris Agreement. Signatories to the initiative set interim targets and champion advocacy and engagement in line with the 2050 goals. According to Robert Branagh, chief executive of LPFA as a new signatory, the scheme will be developing a net-zero “action plan” over the next 12 months.

Investment consultants launch new net-zero initiative

A group of 12 investment consultants with combined assets under advice of more than $10tn for various institutional clients, including Cardano, Hymans Robertson and Willis Towers Watson, have united to form a net-zero project. The group has laid out nine action points, through which its members will deliver on the commitment to achieve global net-zero greenhouse gas emissions by 2050 or sooner. The initiative, endorsed by the UN Race to Zero campaign and the Principles for Responsible Investment, has been led by some members of the Investment Consultants Sustainability Working Groups in the UK and the US. According to a joint statement by the 12 signatories, investment consultants offer education on long-term investment opportunities and risks related to climate change, and they are often the “critical link between asset owners and asset managers” in terms of company and strategy inclusion. Among the action points is a commitment to “assess and monitor asset managers on the integration of climate risks and opportunities in their investment decisions and stewardship, and reflect this evaluation in client recommendations”.

Investor group urges accounts to align with emissions targets

A group of investors managing assets of more than $2.5tn have called on the government and others to compel companies and auditors to file financial accounts aligned with global net-zero emissions targets. The group wrote to Alok Sharma, UK minister for COP26, urging him to support their position paper on this. The document outlined a call to governments to produce accounts that consider the global transition to 1.5C. The paper also urged governments to mandate auditors to “call out” companies that fail to adhere to the measure. Such requirements would provide “clarity on the financial consequences of a net-zero pathway”, along with market incentives to drive flows towards targets, it stated. The letter added that the UK is well-positioned to lead on “net-zero accounting”, due to its position as a key financial centre. The investor group includes Sarasin & Partners, AP2, Brunel Pension Partnership, Candriam, Church Commissioners for England, Federated Hermes, Environment Agency Pension Fund, KBI Global Investors, Laegernes Pension, Local Authority Pension Fund Forum, P+ Pension and PKA.