On the go: The £766.3mn Parliamentary Contributory Pension Fund made a number of new allocations to climate-aware funds over the year, including moving a portion of its equities to low-carbon and sustainable mandates.
The scheme’s annual report revealed that the fund is integrating environmental, social and governance issues throughout its investment process, while making a number of commitments to ESG-aligned mandates throughout the year to March 2021.
First, the scheme invested in the BlackRock Global Renewable Power Infrastructure Fund III, making its first contribution in August 2020, with further capital calls made later in the year.
The target allocation to the renewable fund is 5 per cent of scheme assets. As of the end of March 2021, 3 per cent or £2.6mn was allocated to the fund.
During the year, the scheme decided to restructure its passively managed equities portfolio, by converting its regional market-cap weighted equity mandate with BlackRock to a global, low-carbon approach with the same manager.
The scheme has also allocated 30 per cent of equities to a global sustainable multi-factor equity mandate managed by Schroder Investment Management.
Due to market volatility caused by the Covid-19 pandemic, the equity transition was completed in April 2021 when £226mn was moved to the BlackRock low-carbon fund and £140mn was moved to Schroders’ multi-factor equity fund.
Additionally, in May 2020, the scheme agreed to allocate up to 5 per cent of its assets to an impact investment fund, which would generate a positive social or environmental impact, alongside a financial return.
The scheme explored impact investment options during the year and in May 2021 agreed to invest in Foresight Energy Infrastructure Partners.
FEIP is a sustainability-led private markets energy transition strategy, which targets renewable energy generation and also places a significant focus on supporting infrastructure and technology.
This article originally appeared on MandateWire.com
