The fund developed a climate strategy in June 2021, which was approved by the Pensions Committee in September 2021. The climate strategy recognises the importance of climate change and draws together the fund’s climate related policies, objectives and statements into one consolidated document. The strategy considers:
- More detailed investment beliefs related to climate change
- Integration of climate risks into asset allocation and asset selection
- A climate stewardship plan and strategic actions.
The fund’s climate change strategy explains the fund’s approach to addressing the risks and opportunities related to climate change. Responsibility for the implementation of this strategy, prepared in alignment with the final recommendations of the Taskforce on Climate-related Financial Disclosures (“TCFD”), is held by the scheme administrator and Head of Treasury & Pensions and it is reviewed annually.
Our climate change strategy and climate stewardship plan are available to view in the related documents section.
Climate risk training
Throughout the year, the Pension Committee and officers have received training from Legal and General on investment stewardship; Integration of ESG into investments processes delivered by one of the fund’s investment managers; and responsible engagement presented by Columbia Threadneedle Investments (formerly BMO global Asset Management).
During the year the Pension Committee and officers also responded to various public questions and freedom of information requests on fossil fuel divestment and climate change in particular and provided a formal response to Unison and Fossil Free Shropshire on these issues.
Climate stewardship plan
The fund’s climate stewardship plan identifies specific companies and portfolio managers in which stewardship techniques can be leveraged to further understand and manage climate-related risks within the fund. The climate stewardship plan aligns with and is supportive of the Task Force on Climate-related Financial Disclosures (TCFD) and focuses specifically on climate change and compliments ongoing stewardship activities on other environmental, social and governance factors.
The fund seeks to identify and assess climate-related risks at the total fund level and at the individual asset level. Engagement activity is conducted with investee companies through selected stewardship partners including LGPS Central Limited, EOS at Federated Hermes, Columbia Threadneedle and LAPFF. Based on its climate risk report, the fund has developed a climate stewardship plan which, alongside the widescale engagement activity undertaken by our stewardship partners, includes targeted engagement at investee companies of particular significance to the fund’s portfolio. The climate stewardship plan includes nine companies across five sectors: energy, industrials, materials, mining and utilities. The climate stewardship plan is reviewed annually following receipt of the climate risk report.