London Borough of Newham invests in Paris-aligned index fund

The Local Government Pension Scheme fund has invested approximately £520m in the L&G ESG Paris Aligned World Equity Index Fund, which offers broad exposure to developed market equities, while also integrating reductions in carbon emissions aligned with the international treaty and UN Sustainable Development Goals principles.

According to the manager, the fund tracks the performance of the Solactive L&G Developed Markets Paris Aligned ESG SDG Index, which has been constructed to meet the minimum requirements of the Paris-aligned Benchmark Regulations.

It also tilts towards companies with high ESG scores and excludes others involved in activities such as controversial weapons and tobacco production, as well as companies whose revenues are disproportionately weighted towards coal mining and power generation, fossil fuels, and electrical power generation from fossil fuels, L&G stated.

A recent investment monitoring report from the scheme reveals that the assets for this investment were transferred from the scheme’s existing allocation to the L&G’s Future World Fund. 

Councillor Nareser Osei, chair of the London Borough of Newham pensions committee, said: “ESG is a key consideration for us as we look to contribute towards positive environmental change, while also ensuring that our investments avoid future risks.

“This is underlined by our investment in LGIM’s Paris-aligned fund, which is with a view to supporting the long-term future of our investments, as well as society and the planet.”

Councillor Terence Paul, cabinet member, finance and corporate services at the London Borough of Newham, noted that the fund “will help create better conditions for workers and promote better governance”.

“This fund embraces the council’s values and will play a key role in delivering our climate action plan,” he added.

This article originally appeared on MandateWire.com