Environment Agency to go net-zero, LGPS pool backs ESG framework

EAPF to achieve net-zero by 2045

The Environment Agency Pension Fund intends to halve the carbon emissions from the companies it invests in by 2030, with the goal of reaching net-zero by 2045. The EAPF, which has 39,000 members, around £4bn in assets and is part of the Local Government Pension Scheme, announced the move in a blog post on Monday by Marion Maloney, the fund’s head of responsible investment and governance. She explained that the decision was motivated by the financial risk of climate change and the potential investment opportunities of a net-zero approach. She said: “We don’t want to be invested in companies that are not ready to align to new policies or regulations to help reduce global emissions. We don’t want to be invested in companies that are not resilient to the changing climate. But climate change also presents investment opportunities — the opportunity to invest in products that produce less carbon, use less energy, or help society manage weather-related events such as wildfires and power disruptions.” The EAPF has reduced the carbon emissions from its listed equity portfolio by 74 per cent over the past decade, while the value of those investments rose 94 per cent to £1.25bn over the same timeframe, Maloney added. 

Border to Coast supports ESG framework for alternatives

Border to Coast Pensions Partnership, which handles the assets of 11 LGPS funds worth a total of about £46bn, is supporting a new ESG framework for alternatives launched by its private markets consultant Albourne Partners. Border to Coast’s private markets investment programme is expected to grow to more than £5bn in the next 12 months, and the pool is concerned that the asset class lacks robust and consistent ESG standards. Therefore, the pool with £16bn in assets is supporting Albourne in developing an ESG framework based on the recommended due diligence questions set out by the UN’s Principles for Responsible Investment. The multi-tiered approach includes a questionnaire based on the UNPRI framework and a new proprietary ESG scoring framework, which covers the areas of policy and governance, investment process and monitoring, and reporting. Albourne is rolling out this approach to all the alternative investment managers it currently engages with. Border to Coast chief investment officer Daniel Booth commented: “While ESG reporting has improved in public markets, there is a clear need to enhance standards, transparency and how we measure ESG risk, opportunity and performance in private markets.”

This article originally appeared on Mandatewire.com