Clwyd Pension Fund commits to tripling investments in climate solutions by 2030

Clwyd Pension Fund, part of the Welsh Pension Partnership pool, has pledged to triple its investments in climate solutions by the end of the decade.

The £2.5bn LGPS fund, which invests on behalf of more than 50,000 pension scheme members across Flintshire, Denbighshire and Wrexham, has voted to increase its allocation to climate solutions to 14% of its overall portfolio. This would equate to around £350 million in additional commitments over the next four years, according to papers presented at its Pension Committee meeting earlier this week.

Clwyd already has 5% of its portfolio invested in climate solutions. Including pending transactions, total commitments are expected to reach 10% of the portfolio. Existing investments include renewable energy infrastructure through managers such as Brookfield and Capital Dynamics, as well as Bute Energy projects via the Welsh Impact Portfolio.

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The fund is targeting net zero financed emissions by 2045 and has set an interim goal of reducing portfolio carbon emissions by 50% by 2030.

As part of its plan to accelerate climate action, the Pension Committee also agreed to cut the carbon footprint of its listed equity portfolio by more than 80% by the end of the decade, with the longer-term ambition of transitioning the full portfolio toward sustainable assets.

“Considering the impacts of climate change is not only a legal and fiduciary duty of the fund, but is also consistent with its long-term investment horizon. The fund’s investments need to be sustainable to be in the best interests of all key stakeholders,” the fund said in its statement on climate beliefs.

“As well as creating risk, climate change presents opportunities to make dedicated investments that achieve the required returns while also delivering positive social and environmental impact, such as environmental infrastructure and clean energy,” it added.

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