London Pension Fund Authority and managing climate change risks

Meeting: 
MQT on 2018-11-22
Session date: 
November 22, 2018
Reference: 
2018/3056
Question By: 
Caroline Russell
Organisation: 
City Hall Greens
Asked Of: 
The Mayor

Question

Other than divestment, does the London Pension Fund Authority (LPFA) have climate change policies and a decarbonisation target for its investment portfolio? If not, will you ask the LPFA to review its policies and put in place a decarbonisation target that takes account of the publication in October 2018 of the Intergovernmental Panel on Climate Change (IPCC) report, Global Warming of 1.5C?

Answer

London Pension Fund Authority and managing climate change risks

London Pension Fund Authority and managing climate change risks

Answered By: 
The Mayor

LPFA’s objective is to identify and manage the investment risks potentially faced from Climate Change.  LPFA has a clear Climate Change Policy, agreed in June 2017, which requires its managers to actively identify, manage, and report on the climate risk of investments.  As part of the policy, the LPFA will be considering the portfolio’s alignment with the emissions trajectory needed to meet the Paris Agreement targets.  The LPFA is committed to working to enrich the ongoing consideration of how and when climate change risks could materialise and impact Fund value.  The LPFA’s work to implement this climate policy was recognised this month in a report by Friends of the Earth which highlighted it as one of only four local government pension funds nationally that is developing a strong climate change strategy and approach.

I will continue to work closely with the LPFA to support the implementation of its climate change policy, ensuring it leads in this area amongst local government funds in the UK.