Last year we undertook our first consultation to understand your views on the Fund's approach to setting net zero targets.
We asked
In 2022 and 2023 we engaged with scheme members and other stakeholders through an online consultation. Individuals were invited to submit their response via a ‘Have Your Say’ survey. Throughout the engagement and consultation periods we sent reminders to those signed up to Member Self-Service, and provided notifications to employers.
You said
We received over 1700 responses scheme members, employers and other stakeholders as part of our survey, emails and other representations. The majority supported the Fund’s proposed targets, and its subsequent draft Net Zero Climate Strategy. Predictably there were views either side of this, with some calling for more ambition, and others claiming that climate change is not an issue for the Pension Fund.
Upon analysing the responses, we made changes and improvements to the Net Zero Climate Strategy which were reported in November 2022 and March 2023 to the Local Pension Committee. All responses fed into our Net Zero Climate Strategy and support our approach to managing climate risk and how we engage with our investment managers.
We will continue to engage with scheme members and stakeholders as part of any future review.
What is the Fund doing to achieve Net Zero 2050?
Wherever possible the Fund looks to invest in a way that ties in climate friendly factors with positive financial performance. As at the end of 2023 this means the Fund has already invested over £1billion in these types of funds, from forestry to renewable energy. A snapshot of these investments is set out below:
- In July 2024, the Fund reiterated its commitment to investment in forestry with Stafford Capital that has been held since 2011. These investments sequester the equivalent annual emissions of 193,000 cars, or 45% of reported emissions within the city of Leicester, while providing financial returns to the Fund. The Fund has also committed further capital through a Timberland Carbon Offset Opportunity Fund, which looks to plant forests to provide a source of sustainable, low carbon wood and high-quality carbon offsets.
- Back in 2020, we invested over £800 million in a climate fund, which favours investment in companies that take a proactive approach to environmental factors, moving away from the worst emitters.
- The Fund has further committed £80 million to a renewables fund which includes the development and construction of solar power and battery systems, to support the decarbonisation of the energy system, and to meet power demand from data centres.
- The Fund has made investments in a Low Carbon Transition Equity Fund that reduces exposure to fossil fuels, while improving exposure to climate solutions and provides year on year decarbonisation.
Reaching net zero will be an ongoing journey and cannot be achieved by new investments alone. The Fund has committed to working with its investment managers and engaging with companies rather than wash its hands of its responsibilities.
We will continue to develop the approach in light of views of members, developments nationally and internationally, recognising all governments, industries, companies, financial institutions, markets and individuals must act together with a common goal to shift towards a net zero world, in line with the Paris Agreement.
The Fund will continue to manage this carefully and not lose sight of its primary purpose of ensuring the financial sustainability of the Fund for its members.
