On the go: The Local Government Pension Scheme Central Pool has launched a new equity fund incorporating key climate change considerations in a bid to deliver long-term growth.
The World Equity Climate Multi-Factor Fund brings together £2.1bn of the LGPS Pool’s partner fund assets under management.
The LGPS Central Pool, which is made up of nine Midlands-based local government pension funds, holds approximately £45bn of investment assets. Two local authority pension schemes, the West Midlands Pensions Fund and Cheshire Pension Fund, will be the first to invest in the fund, which aims to tilt away from companies with greater carbon emissions and move towards those with green revenue streams.
The LGPS Central Pool is fully aware of the risks and challenges that climate change poses – not only for the planet but also for investment returns
Mike Weston, LGPS Central Limited
The fund will track the FTSE All-World Climate Balanced Comprehensive Factor Index. The index examines three key climate change considerations – carbon emissions, fossil fuel reserves and green revenues.
The strategy will be managed by LGPS Central’s in-house investment team, with monitoring and ongoing stewardship undertaken in line with the pool’s responsible investment framework.
Mike Weston, chief executive of LGPS Central Limited, commented: “The LGPS Central Pool is fully aware of the risks and challenges that climate change poses – not only for the planet but also for investment returns – and our new fund enables us to align our shared sustainable investment ethos with our long-term investment goals.”
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In a joint statement, Cllr Steve Simkins, chair of the pensions committee at WMPF, and Cllr Carol Gahan, cabinet member for legal and finance at Cheshire West and Chester Council, said: “This investment signifies a decisive step by both funds to recognise the potential to add return from focusing on those companies who are taking a proactive approach to climate change.
“We particularly welcome the fact that the fund will boost investment into companies generating green revenues; these companies will be the leaders in shaping our future.”
