LGPS Central will also provide investment opportunities in the renewable energy and green tech sectors
LGPS Central has committed to achieving net zero for the assets under its stewardship by 2050.
In a statement published on its website yesterday (26 January), the £28.5bn local government pension scheme (LGPS) pool said it would use the Institutional Investor Group on Climate Change's net-zero investment framework to achieve net-zero emissions across its internally and externally managed portfolios by at least 2050, focusing initially on listed equities, corporate bonds, sovereign bonds and real estate.
In addition, LGPS Central committed to an interim target aiming to achieve a 50% reduction in greenhouse gas emissions by 2030 across its equity and fixed income portfolios.
It said it was committed to extending its focus to include other asset classes as reliable data became available and also to provide investment opportunities in the renewable energy and green tech sectors to match the demands of its partner funds.
LGPS Central said its aim was to achieve a "real reduction in greenhouse gas emissions rather than an avoidance of them" - noting it would engage with investee companies to achieve this aim and expected its external managers to do likewise.
Director of responsible investment and engagement Patrick O'Hara said: "This commitment provides us with a set of measurable targets, a common focus and renewed momentum for our climate strategy and associated engagements.
"We look forward to playing our part as responsible corporate owners in driving the transition to a low carbon economy."
LGPS Central manages the pooled assets of eight Midlands-based LGPS funds representing over one million scheme members: Cheshire, Derbyshire, Leicestershire, Nottinghamshire, Shropshire, Staffordshire, West Midlands, and Worcestershire.
Make My Money Matter senior finance adviser Huw Davies praised the move for "going further on net zero" by committing to provide opportunities to invest in climate solutions, halving emissions by 2030, and engaging with portfolio companies to make them change.
He said: "LGPS Central is setting an example for how the local government pension sector can make the transition to net zero."
