One of Scotland’s largest local government pension schemes has hardened its approach to fighting climate change.
The Lothian Pension Fund, which manages more than £10bn worth of assets for 93,000 people, is to promote a managed decline of the fossil fuel industry while increasing its exposure to climate solutions.
This is at the heart of the fund’s new climate change policy, where management confirmed their commitment to the real economy achieving net zero by 2050.
Lothian will also draw up an action plan to support its climate-focused investment strategy and report in line with the recommendations of the Task Force on Climate-related Financial Disclosures.
This new policy comes after the scheme was criticised by climate groups for investing in fossil fuels.
Emmanuel Bocquet, Lothian’s chief investment officer (pictured), said the new policy is designed to strike the right balance between implementing its climate commitments and delivering the required risk-adjusted investment returns over the long term.
Lothian’s head of responsible investment, Gillian de Candole, added that climate change is a systemic issue presenting financially material investment risks, making stewardship a priority for the scheme.
“Our new climate change policy sets out the actions we’re taking to enhance the resilience of our investment strategy.”
She added that supporting the real-world transition to net zero requires a “significant change in the shape and structure of the global economy, including a shift away from fossil fuels”.
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