TfL, Avon Pension Fund and Phoenix Group commit to net zero

TfL Pension Fund to be net zero by 2045

Trustees of the TfL Pension Fund have unveiled a net-zero plan that will see the scheme achieve a 55 per cent reduction in its carbon emissions by 2030 at the latest, and a 100 per cent reduction no later than 2045. The plan builds on previous environmental efforts, such as a coal exclusion policy, by aligning the fund’s investment opportunities to the UN’s Sustainable Development Goals. The SDGs will be combined with ESG scores and carbon footprint data to monitor the progress of the fund and will cover the entirety of the plan’s asset classes, including private and public markets across equities, credit, bonds, infrastructure and real estate. The plan’s trustees will also publish an annual sustainability report to keep members up to speed with progress towards its goals, and added that they believe the net-zero plan is entirely consistent with their fiduciary responsibility to earn returns needed for the long-term financial health of the fund.

Avon shifts £780m into Paris-aligned benchmark

Avon Pension Fund, part of the Local Government Pension Scheme, is set to transition its approximately £780m legacy, low-carbon equity strategy into a Paris-aligned benchmark — a new index developed by Brunel Pension Partnership and FTSE Russell. The fund added that it has set a target to reduce the absolute emissions in its equity portfolios by 43 per cent by 2025, and by 69 per cent by 2030, compared with a 2020 baseline. Shaun Stephenson-McGall, chair of the Avon Pension Fund investment panel, said the changes were “the culmination of a lot of hard work”, and marked “a turning point in the fund’s approach to climate change as we move towards solutions that offer credible pathways to net zero”. He added that the fund will take stock of its progress against its goals in 2022. The LGPS fund said that it would be decreasing its allocation to emerging markets, “choosing instead to concentrate its engagement efforts in developed markets where most of its capital is allocated”.

Phoenix Group sets 50% carbon intensity reduction target for 2030

Phoenix Group has announced it has set both 2025 and 2030 carbon intensity reduction targets for its investment portfolio. These interim targets are part of the group’s pathway to achieving net-zero carbon for investments by 2050, in line with its science-based targets commitments. The target will apply to £250bn of investments where Phoenix Group has control and influence, of which £160bn is in pension funds including Standard Life, Phoenix Life and Reassure. The group estimates that once achieved, the impact of the 2030 target will deliver carbon reductions equivalent to the annual emissions of heating more than 6m homes. Andy Briggs, group chief executive of Phoenix Group, commented: “At Phoenix Group we have set an ambition to lead the way on responsible investment and to drive forward action to support the transition to a zero-carbon economy. Investing responsibly is also about encouraging good corporate governance practices and positively contributing to environmental and wider societal issues while managing risk and ensuring good outcomes for customers.”