Shropshire County Pension Fund to target net zero emissions by 2050 or sooner
At the Shropshire County Pension Fund (“the Fund”) Committee meeting on Monday 17 January 2022 Pension Committee Members agreed that the fund would target net zero emissions by 2050 or sooner.
Councillor Thomas Biggins, Chair of Shropshire Council’s Pension Committee, said:
“Pension Committee Members agreed that targeting net zero would have the greatest overall impact on real world emissions, de-carbonising the investment strategy, managing climate risk and ensuring the fund keeps pace with the transition to the low carbon economy. This is because net-zero is an all-encompassing target that considers scope 1, 2 and when possible scope 3 emissions from all companies, regardless of sector. Noting that only 13% of the fund’s total equity carbon footprint is attributable to holdings in energy stocks, with companies in the industrials, materials and utilities sectors contributing 68% (based on analysis from the fund’s 2021 Climate Risk Report).
“Furthermore, as a material first step to achieving the net-zero objective, Pension Committee members agreed two immediate changes to the way the fund’s equities are managed. Both changes will have a material impact on the carbon footprint of the fund and the type of companies invested in:
- Members agreed to move c.£130m out of UK equities into two sustainable equity managers. These managers will invest in companies that enable the green transition alongside other companies that contribute to one or more of the UN’s sustainable development goals (SDGs).
- Members agreed to move c.£700m out of a FTSE developed index tracker with L&G into the Solactive L&G Low Carbon Transition Global Index fund. This change will reduce the carbon footprint of these assets by c.50% with a further 7% per annum reduction built in until net-zero in 2050, together with increasing exposure to companies that are enabling the green transition.”