Avon Pension Fund, the £5.4 billion fund which serves 140,000 people, has brought forward its carbon net zero target to 2045.
It follows recent initiatives such as the 2020 commitment of £400 million for renewable infrastructure and the investment of £2 billion in climate-aligned sustainable equities between 2021 and 2023.
The Fund’s Pension Committee took steps in December 2023, one of which was the implementation of a new investment strategy with independent monitoring against external criteria such as Climate Action 100+. This policy requires high-carbon corporations to align with net-zero targets by 2030 or face divestment.
Aiming for 100 per cent coverage of meaningful climate metrics across all asset classes, climate targets were broadened to include a 60 per cent reduction in the carbon intensity of the Corporate Bond portfolio by 2030. Intermediate targets were set for carbon emissions reduction (43 per cent by 2025, 69 per cent by 2030).
The Committee pledged that by 2024, 70 per cent of financed emissions would be in line with net zero or actively involved, and by 2027, that percentage would rise to 90 per cent.
The Committee is also looking into the allocation of assets to nature-based investments, including funds that focus on biodiversity, agriculture, forestry, and forests, with the Investment Panel evaluating these opportunities in 2024.
Avon Pension Fund Committee chair Councillor Paul Crossley says: “Climate change poses the biggest risk to our planet. There is no Planet B and we can all play our part in protecting Planet A. During 2023 we consulted extensively with local councillors, staff, employers, and trade unions. We also ran a member survey which received over 5,000 responses.
“There was broad agreement among stakeholders that the Avon Pension Fund should set more ambitious climate goals and we are delighted to bring forward our net zero target to 2045, an ambitious but achievable date. We will keep this target under regular review and will seek to accelerate further as technology and government policy develop.”
Avon Pension Fund head of pensions Nick Dixon says: “We believe there’s increasing convergence between financial returns and responsible investing. We want to seize this opportunity for the Fund to achieve its objectives in a sustainable way, contributing positively to the climate transition. Our new strategy delivers a step change in our approach, focused on meaningful real world impacts.”
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