Newham Council’s Pension Fund has been shortlisted for best climate change strategy in the Local Authority Pension Fund (LAPF), Investment Awards 2021.
The Newham Fund aims to be a leader in fighting climate change - dramatically reducing its investment in fossil fuel companies to £3m (0.20%) of total assets, - one of the lowest in the Local Government Pension Scheme.
The Fund’s climate change strategy journey started four years ago when it designed an Environmental, Social and Governance (ESG) focused real asset mandate aimed at capitalising on investment opportunities focused on attractive risk and return characteristics with a substantial exposure to renewable energy.
Councillor Nareser Osei, Chair of Newham Pensions Committee said:
“It’s really pleasing that the Newham Pension Fund has been shortlisted for this prestigious award. The focus of all our pension fund decisions has to be that of good governance, a strong financial return and a focus on the fiduciary outcomes of the fund - that of protecting members’ crucial pensions.”
“But it’s also vitally important that the Fund is aligned to the values of pursuing a carbon neutral agenda and investing responsibly. “
One such holding is the Fund’s investment in the Cory waste recycling plant that generates energy from waste. The plant uses Thames barges to transport waste, avoiding 100,000 truck journeys a year, saving 13,500 tonnes of CO2 annually.
More recently, the Fund took decisive action to decrease carbon emissions of its equity portfolio by 50%, made possible by its £520m seed investment in the ESG focused Legal and General Paris Aligned World Equity index fund. This action was the equivalent to removing an estimated 9,500 cars off the road.
The Fund has worked closely to create a strategy that will make significant reductions in carbon emissions and help change corporate behaviour.
The Fund’s approach to tackling climate change risks is embedded in its ESG policy:
- To invest in a way that leads to longer-term stable investment returns.
- To protect the value of the assets that are held; and
The Committee’s primary consideration is fiduciary and it does this by managing risk from stranded assets and balancing engagement, divestment and the best use of opportunities as they emerge.
The LAPF Awards will be announced on Wednesday 15th December