Council's pension fund sector-leading decarbonisation plans and will invest in climate solutions
Hackney Council’s Pension Fund has set a new, highly ambitious, series of climate targets to help it achieve net zero by 2040.
The fund’s first climate target, set in 2016, saw it pledge to reduce its exposure to fossil fuel reserves by 50% between 2016 and 2022- the first council in the country to make such a commitment.
By 2022, it had reduced its exposure by 97%, a significant outperformance of the original target. However, to truly achieve net zero, the fund needs to look more widely than just exposure to fossil fuel reserves owned by energy companies.
Now, the Council’s Pensions Committee has set three ambitious targets with a five to seven year timeframe to help keep the fund on track to achieve its net zero ambition.
The first target is to reduce the fund’s carbon footprint by 50% by 2030. This will cover carbon emissions across all sectors of the economy, unlike the fund’s previous carbon reserves target which focused on energy companies.
The second target is to align the fund’s portfolio to a 2C warming scenario by 2030 with a 1.5C goal for 2040. This is a forward-looking target to help the fund focus on driving change in the real economy by investing in assets that make a positive contribution to the transition to net zero.
The fund’s net zero plans sit alongside the Council’s Climate Action Plan, which is being updated following extensive public consultation last year. Whilst the Council is working within the local area to achieve net zero by 2030 for its own emissions, the pension fund has a longer timeframe as it needs to look across the whole world economy.
The final target is for the fund to allocate 10% of assets to climate solutions over the next five years. This could include assets that help avoid carbon emissions, such as renewable energy or nature-based solutions such as sustainable forestry which can help remove carbon from the atmosphere.
Hackney Council has a progressive Climate Action Plan that sets out a vision for a greener Hackney and a fair and just transition to net zero.”
As part of this, the Council is undertaking or committed to some of the most robust actions of any Council in the country to tackle the climate emergency.
The council’s pension fund has a part to play in this. By law, our first priority as the Pensions Committee must be to protect the value of our investments to pay people’s pensions, including key workers like social care workers, waste operatives and parks staff.
But at the same time we have also set ourselves some of the most ambitious plans of any local authority or institutional fund - to achieve net zero emissions by 2040, and our new interim targets will help us to get there. They represent a meaningful and credible commitment, and will help Hackney remain a leader in this field.