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Big reduction in carbon emissions for Devon pension fund

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There’s been another big reduction in the carbon emissions of companies held by Devon County Council’s pension fund.

New figures show that the overall reduction in carbon emissions is now well over a third – 37 per cent – in the last two years.

That’s grown from a figure of 21.5 per cent in December 2019.

The fund looks after the pensions of employees in the majority of Devon’s public sector organisations including emergency service staff and local councils.

It’s already pledged that its portfolio of investments will be net-zero by 2050 at the latest with a target of decarbonising its current investments by seven per cent a year.

Devon County Council Treasurer Mary Davis told the Investment and Pension Fund Committee:

“The chart shows an overall reduction of 37 per cent in the Fund’s WACI (the measure of a portfolio’s investments in businesses that are deemed ‘carbon-intensive’) since March 2019, which is good progress towards the target of a 50 to 75 per cent reduction by 2030, and well ahead of the seven per cent per year target.

“It should be noted that the Covid pandemic will have had an impact on the figures, as a reduction in economic activity has had a beneficial effect on reducing emissions.

“The growing share of the market of tech companies, with lower levels of emissions than traditional industries, will also have contributed. Therefore, it may be more difficult going forward to maintain this level of progress.”

The committee agreed to invest another £100 million in a sustainable equities portfolio run by fund managers Brunel.

“This portfolio includes a higher requirement on managers to look for companies promoting sustainability, which will include looking at issues such as climate change and promoting positive impacts on society,” said Mrs Davis.

“The Sustainable Equities portfolio is likely to provide some mitigation against falling markets and therefore assist with effective risk management.

“Our policy continues to emphasise that we want to see real reductions in global emissions which means that we need to see investee companies reducing their emissions, rather than simply divesting from higher emitting companies and investing in lower emitting companies, which will do little to make any real difference to global emissions.

“The policy also reinforces that any review of our investments must continue to ensure that the fund meets its fiduciary duty to achieve investment returns to meet its pension liabilities.”

The chairman of the Investment and Pension Fund Committee, James Morrish, said:

“I’m delighted by this significant reduction in carbon emissions.

“We are not only committed to reducing the carbon footprint of our current investments but to ensure that in the long term our investments are carbon neutral.

“To achieve real reductions, we must engage with the companies we invest in and hold them responsible for their product throughout its life, not just in its manufacture. By doing this we aim to contribute to making real carbon reductions globally.”