Parliament pension fund gets greener

Pensions Age is reporting that the £733m Parliamentary Contributory Pension Fund (PCPF) is attempting to ramp up its renewable investments and reduce more fossil fuel exposure.

The 2019 Annual Review revealed that the trustees have committed 5 per cent of scheme assets to a BlackRock Global Renewable Infrastructure strategy and agreed to allocate 30 per cent of the existing equity structure to a global sustainable multi-factor equity with Schroders.

Although the fund has made significant investments in renewable energy and moved away from fossil fuel assets the fund is now going much further in an effort to align the investment strategy with the Government’s own climate action targets.

However, the fund has not yet entirely diversified from fossil fuel companies and includes holdings in Shell (£8m) and BP (£4.4m) – albeit that they are reducing these and both companies are embarking on major plans toward carbon neutrality.

Commenting within the report, PCPF chair of the trustees, Sir Brian Donohoe, said: “We continue to focus on investment matters at our meetings and I am pleased to report that the fund returned 7.4 per cent during the year ending 31 March 2019 which was ahead of our target. The outperformance was largely as a result of strong returns from equity markets.

“We are ever increasingly focussed not just on investments, but on responsible investment, as owners of the assets of the fund. During the year, changes to pension legislation meant that pension fund trustees were required to update the fund’s Statement of Investment Principles to address all financially material considerations, which included environmental, social and governance (ESG) and climate change risks.”

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