Pension Fund Commits to Ambitious Carbon Reduction Targets

The Tyne and Wear Pension Fund has committed to ambitious targets to reduce its carbon emissions from 2019 levels by up to 35 per cent by 2025 and by up to 60 per cent by 2030.

The bold targets are as a result of a number of measures the Fund has taken to improve its green credentials which include the production and reporting of carbon emissions data and an increased focus on climate risk within the investment strategy.

A report to members highlights that analysis of the Fund's carbon footprint shows that carbon emissions intensity has fallen by nearly 30 per cent from 2010 and by 15 per cent over the last two years. 

One reason for the recent reduction in emissions is the decision of the Fund to invest £650m into the Future World Index Equity Funds, as part of its ongoing commitment to generating sustainable long-term returns in a responsible manner. This range of funds invests more in companies that score well against environmental, social and governance criteria including companies, which are less carbon-intensive or earn green revenues.

Members of the Pensions Committee agreed today to approve a Climate Policy for the Fund and set a Net Zero carbon emissions target for 2050 or sooner.  This is in line with the majority of developed economies, in which the Fund invests, which have also set this date as their target

The Fund will now produce a roadmap setting out how to deliver its policy and it will work closely with its pooling partner Border to Coast and other investment managers to achieve its decarbonisation ambitions.

Councillor Anne Walsh, Chair of the Pensions Committee, said: "While we all would like to see an earlier target, it must be recognised that delivering a Net Zero carbon emissions target for the investment portfolio of a pension fund, that invests globally across a wide range of sectors and different asset classes, is materially more difficult than setting a target for an individual organisation.

"Working with our partners, we will draw up an action plan and will review our long and medium term targets every three years to ensure we remain on target and will seek to bring forward the Net Zero ambition when this is considered possible".