Local Government Pension Scheme: Analysis of Net Zero targets
Local Government Pension Scheme: Analysis of Net Zero targets
24 Sep 2024
Within this thought leadership report we investigate the LGPS funds’ commitments to Net Zero and what steps they have taken within their investment strategies to support the targets.
Climate change issues are a preeminent topic within global news and the financial markets. There has been an increase in regulation, notably the requirement for companies and institutions to report on how they manage climate change risks and opportunities.
This is an area of development for all pension schemes, including LGPS funds.
We reviewed all 97 LGPS funds in England, Wales and Scotland, and the eight Asset Pools, to investigate their Climate Related Financial Disclosures (TCFD) reports where produced, or otherwise separate climate and responsible investment policies.
Some of our key findings:
- 49% have set a net zero target
- Of these, the majority aim for net zero by 2050
- Five funds are striving to achieve net zero by 2030
- 74% have switched some of their investments into strategies which have sustainable objectives built in
- 26% indicated that they had directly invested into climate solutions
In this report, we:
- Explain our key findings
- Give an overview of the approach taken to set Net Zero Targets
- Discuss the steps taken within investment strategies
- Outline other considerations for LGPS when setting sustainable investment strategies
- Offer next steps for LGPS
“LGPS funds have a responsibility to manage key investment risks associated with climate change, and are ideally positioned to take advantage of the long-term opportunities that will come with the climate transition.”
Alex Quant
Head of ESG Research