ESG spotlight: A roundup of the latest news on environmental, social and governance initiatives, as the Universities Superannuation Scheme increases the scale of its net zero ambitions, the Pension Insurance Corporation backs Northern Irish social housing and the Railways Pension Fund agrees to fund affordable housing in east London.
USS makes sustainable alternatives commitment
The £82.2bn Universities Superannuation Scheme has pledged to invest £500mn in private companies that are helping the low-carbon transition. It has also set interim decarbonisation targets. The scheme will invest £500mn in high-growth, privately owned businesses that are developing technologies and services supporting the decarbonisation of the global economy. The investments will be managed in-house by the scheme’s private markets team and made either directly or through funds. They will initially sit within the defined benefit portion of the scheme and will then be extended to its defined contribution mix. USS has also pledged to cut the carbon intensity of the companies in its portfolio by 25 per cent by 2025 and by 50 per cent by 2030, from 2019 levels. These interim targets are part of the scheme’s efforts to become net zero for carbon by 2050, as pledged in May 2021. As at March 31 2021, the scheme invested about £1.2bn in wind farms and green technologies as part of its renewable energy strategy. It plans to continue to invest in wind and solar generation capacity. It has also recently unveiled plans to transition £5bn of its global equity assets to a climate transition index with Legal & General Investment Management and away from BlackRock, as reported.
This article originally appeared on MandateWire.com
PIC invests in Northern Irish social housing
The £47.6bn Pension Insurance Corporation has completed a £100mn debt investment with Apex Housing Association. The deal marks the pension insurer's first social housing investment in Northern Ireland. The invested assets will go towards the development of around 1,500 new homes as part of Apex’s long-term strategy, with a focus on developing general needs family accommodation, as well as to refinance existing debt. The new homes will be built to very high environmental standards and will use additional energy-efficiency measures such as solar panels and batteries. The deal uses a deferred drawdown structure, with £60mn initial funding and £40mn deferred for one to two years to meet Apex’s development plans. The debt is due to mature in 2041 and 2055 to match PIC’s pension commitments in those years, and the funds are secured on a pool of social housing assets. Eugenia Korobova, debt origination manager at PIC, said: “We are very pleased to have worked with Apex Housing Association on this transaction, which is our first housing association investment in Northern Ireland.”
This article originally appeared on MandateWire.com
UK Railways Pension Fund invests in build-to-rent housing
The £35bn Railways Pension Scheme has entered into a £92mn funding deal to develop 198 build-to-rent apartments in Barking, East London. The scheme has entered into a deal with real estate specialists Revenue + Capital and developer Fifth Capital to develop the apartments at Trocoll House in Barking. Railpen acquired the land from Revenue + Capital with a 50-year lease to be granted to the London Borough of Barking and Dagenham upon practical completion in 2025. The deal will provide Railpen members with a strong economic asset that provides a secure, predictable, inflation-linked cash flow. The acquisition has a strong ESG focus as 35 per cent of the apartments will be affordable and will help tackle the local housing shortfall. Trocoll House will provide good quality private rental accommodation and affordable housing for local people and young professionals looking to move to the area. The purchase is also subject to green lease clauses, obligating the tenant to maintain sustainable responsibilities throughout the operation and occupation of the development. Julian Allport, investment manager at Railpen, commented: “We are pleased to have agreed this deal with Fifth Capital for the development of Trocoll House.” He continued: “The build-to-rent sector has been resilient throughout the pandemic, delivering strong investment returns. We look forward to being a long-term partner of Barking and Dagenham Council.”
This article originally appeared on MandateWire.com
