LGPS pool expands climate reporting beyond TCFD targets

Brunel Pension Partnership, the £35bn Local Government Pension Scheme (LGPS) pool, has announced that 85% of all its assets are now covered by a Paris Alignment target.

This year, the pension pool has expanded its climate reporting to surpass the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), which became mandatory in 2024. This enhancement includes more detailed reporting on industry-specific averages and proxies for Enterprise Value, such as cash, according to the pool's latest Climate Change Progress Report 2024.

Overall, 85% of Brunel’s total assets now have Paris aligned targets set against them, equating to 92% of assets in scope. Portfolios which are still to set Paris aligned targets in 2025 include those in private equity and debt as well as diversifying returns.

Moreover, all of Brunel’s portfolios have now achieved at least 7% per annum carbon reduction from the 2019 baseline, with the aggregate portfolio achieving a decrease of 57% from the baseline of 2019 to 2030, according to the pool's report.

Brunel has committed to net zero on financed emissions by 2050 and uses the TCFD and the Net Zero Investment Framework to report on its climate-related progress rather than any individual metric.

Laura Chappell, chief executive officer at Brunel Pension Partnership, said: “Climate reporting at Brunel has a dual role – to improve the delivery of our climate ambitions across our portfolios, and to set a standard that resonates across the wider industry.”

Fossil fuel exposure

The climate report also covered Brunel’s exposure to fossil fuel activities, revealing that its aggregate portfolio is less exposed to both fossil fuel revenues (0.85% vs 2.20%) and future emissions from reserves (8.1 MtCO2 vs 27.9 MtCO2) than its custom benchmark.

Brunel currently has investments in NextEra Energy, its largest contributor to natural gas power generation revenues, and Shell, its largest contributor to crude petroleum and natural gas extraction revenues.

However, the report supported the pool’s investment in NextEra Energy as it has made “significant investments in renewable energy and storage projects”, with it being the “largest corporate generator of renewable electricity in the world”.

Brunel is also engaging with Shell over its action towards reaching net zero, with the pool backing a climate resolution put forward at its AGM this year by campaign group Follow This.

“Implementing our climate change policy is not just about ticking boxes or demonstrating progress. Everything we do is designed to make real-world change and we work hard to the maximise our impact. We focus on systemic change because although it can be slow, it allows for the most widespread impact and drives real change,” said Faith Ward, chief responsible investment officer at Brunel.