ESG spotlight: A roundup of the latest news on environmental, social and governance initiatives, including the Worcestershire County Council Pension Fund investing in a climate fund, bulk annuity insurers all having set net zero targets, and the Church of England Pensions Board slashing the carbon intensity of its holdings by a fifth.
Worcestershire opts for reduced carbon strategy
The £3.6bn Worcestershire County Council Pension Fund has invested in a climate fund with the LGPS Central pool. In the last quarter of 2021, the scheme transitioned a £211.4mn global equity portfolio held in a low volatility fund run by Legal & General Investment Management to the pool’s All World Climate Multi Factor Fund. The move is part of the scheme’s efforts to make its equity portfolio more sustainable following an ESG audit carried out last year. The scheme also switched a £122.5mn allocation to a RAFI reduced carbon strategy with LGIM to the manager’s quality companies portfolio, in which it already invested £221.6mn. Worcestshire also said it intends to divest from its Russian holdings, which account for 0.15 per cent of its portfolio.
This article originally appeared on MandateWire.com
All bulk annuity insurers have net zero targets
All UK bulk annuity insurers have now set net zero targets for their asset portfolios, according to LCP, with almost all having published interim goals for achieving this. Seven out of the eight insurers had formalised net zero targets as of September 2021, with the policy of Canada Life’s parent company helping to complete the set by March 2022. Seven have targeted 2050 for net zero, while Aviva has earmarked 2040, although this represents an ambition rather than a formal pledge. Aviva’s interim emissions-reduction target for 2030 of 60 per cent is also the most ambitious, with five other insurers aiming for 50 per cent and the remaining two not disclosing a goal for this timeline.
Church of England slashes carbon intensity
The Church of England Pensions Board, which manages almost £3.7bn in assets, cut the carbon intensity of its holdings by 21 per cent in 2021. The board said in its 2021 stewardship report that it is “well ahead” of its 2050 target, with its investments in climate solutions and green revenue now almost 12 times the value of its investments in oil and gas. These investments, which amount to £118.7mn, are evenly split between public and private markets. Only 0.28 per cent of the fund was invested in oil and gas at the end of 2021.
