Giant local authority pension fund uses World Environment Day to confirm progress is being made to curb carbon impact of investments
The Brunel Pension Partnership has reduced the carbon intensity of its active portfolios by seven per cent compared to its respective benchmarks, it revealed late last week.
In its first responsible investment and stewardship outcomes report, the Local Government Pension Scheme (LGPS) pool also said at least 35 per cent of its cycle one infrastructure investments are in renewable energy, and that it had engaged with 867 companies across 2,537 issues during 2019.
The report, published to coincide with World Environment Day, also revealed it had a lower exposure to fossil fuels, at 9.4 per cent compared to a benchmark of 12.4 per cent, and disclosed reserves, at 5.2 per cent versus 7.4 per cent.
The weighted average carbon intensity of the Brunel Active UK Equity Portfolio had reduced from 362 fund emissions per £1m invested in March 2018 to 259 on the same measure as of December 2019.
Chief executive Laura Chappell said: "Our clients have high ambitions for strong returns by investing in a world worth living in, and the Brunel Pension Partnership is proving it can help deliver those goals. This report reflects on a critical year that has seen successful outcomes in a wide range of sustainability themes from climate change to cost transparency.
"Partnership remains key to our success, and many of the achievements disclosed in our first report came from working with our clients and asset managers on ESG issues. As the Covid-19 crisis has shown, managing these risks is crucial to protect the future interests of our clients and their beneficiaries."
The pool has recently supported a global coalition of investors in their engagement with Facebook, Alphabet, and Twitter to strengthen controls to prevent livestreaming and distribution of objectionable content, and all of its listed market fund managers are achieving or committed to cost transparency.
Earlier this year, the pool appointed Caceis to provide cost transparency and benchmarking services across the partnership, while also announcing it would oppose reappointment of board members or remove from its portfolio those asset managers that did not take action on climate risk.
As of last December, Brunel managed around £15bn of the £32.7bn of assets of its partner funds: the local authority funds of Avon, Buckinghamshire, Cornwall, Devon, Dorset, Gloucestershire, Oxfordshire, Somerset, and Wiltshire, as well as the Environment Agency Pension Fund.
This article first appeared at Professional Pensions
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