LGPS Launches Climate Change Strategy

The British fund manager looks to capitalize on big interest in green finance

LGPS Central has announced the launch of a multi-factor equity fund. The manager of pooled assets from nine British public sector pension funds say that climate change sits at the center of the investment strategy.

The Cheshire Pension Fund and West Midlands Pensions Fund will reportedly guarantee the initial investment.

LGPS Central – The All World Equity Climate Multi-Factor Fund

The All-World Equity Climate Multi Fund will track the FTSE All-World Climate Balanced Comprehensive Factor Index. This fund will center around three climate change factors: Green revenues, fossil fuel reserves, and carbon emissions.

According to reports, the LGPS Central In-house investment team will manage the strategy.

“The pool is fully aware of the risk and challenges that climate change poses – not only for the planet but also for investment returns – and our new fund enabled us to align our shared sustainable investment ethos with our long-term investment goals,” said CEO Mike Weston.

LGPS’s nine existing pension funds comprise the Cheshire, Derbyshire, Leicestershire, Nottinghamshire, Shropshire, Staffordshire, Worcestershire, West Midlands, and the West Midlands Integrated Transport Authority Pension Funds. Further, the total AUM of these funds is roughly £45 billion.

Emissions and Efforts

Meanwhile, the announcement of the fund comes at a critical time for ESG and sustainability practices. Furthermore, the recent UN Climate Action Summit in New York failed to deliver any significant concessions from major greenhouse emitters.

Still, additional nations did pledge to develop stricter Nationally Determined Contributions in 2020. In addition, insurers and pension funds have committed to a pledge to divest up to $2.3 trillion from carbon-intensive industries.

Related: Dennis White Takes Over Massive Chicago Pension Fund (and More People on the Move)

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October 17, 2019

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