Local authority pension fund members vote in favour of goal for investments to reach net zero emissions within the next decade
The South Yorkshire Pensions Authority's (SYPA) investment portfolios must be carbon neutral by 2030 under a set of new climate targets which secured backing from its members last week.
"We have acknowledged for some time that climate change is the biggest risk facing the value of our scheme members' pension savings," said SYPA chairman and councillor Mick Stowe. "This is the next step along the road to effectively managing that risk."
The authority is also set to work alongside the Border to Coast Pensions Partnership on its carbon neutral goal. The Leeds-based Local Government Pension Scheme pool, which manages investments on behalf of its £45bn partner funds, become a signatory of the United Nations supported Principles for Responsible Investment in January.
"We cannot do this on our own and we will be looking to bring our colleagues within the Border to Coast Pensions Partnership on this journey with us," Stowe added.
Further work on the authority's sustainability aims has also been commissioned later this financial year in the form of a "comprehensive impact reporting framework", he explained.
"Pension funds rightly get criticised for the level of emissions and other impacts from their listed equity investments," said Stowe. "However, these only represent around half the story and alongside setting a net-zero goal we need to be able to tell the full story."
The framework will cover all of the fund's investments in order to provide a rounded picture of the overall level of emissions from the portfolio. SYPA is expected to release a report on its position with regards to these broader aims at the end of the 2020/21.
"This work will enable us to provide a more balanced picture which properly reflects both the positive steps we are already taking such as significant investment in renewable energy and our more traditional investments in listed companies," Stowe explained.
It comes amid growing momentum in the pensions sector to align investment portfolios with UK climate targets, as awareness and concern over the risks posed to savers money by climate change and the net zero transition. NEST became the first UK pension fund to set its sights on net zero emissions across its investment portfolio by 2050 in, followed last week by Aviva unveiling a plan for its default pension funds to also reach net zero by the same date.
Today, meanwhile, BT's £55bn pendion fund - the UK's largest - committed to achieving net zero emissions across its portfolio by 2035, in line with a science-based 1.5C global warming trajectory, as it became the latest member of the global Net Zero Asset Owners Alliance.
A version of this article first appeared at Professional Pensions
Carney concedes avoided emissions do not count toward science-based net zero targets, despite previously claiming asset manager Brookfield is 'net zero today' due to its investments in renewables
SEC climate disclosure plans, hydrogen developments, and climate-committed K-Pop are to the fore in this week's Global Briefing
Jim Giles explores the deep divisions that are shaping the emerging field of soil-based offsets
UN urges countries to submit tougher climate plans to meet Paris goals and prevent climate catastrophe