JOURNEY TO NET ZERO: BORDER TO COAST INCREASES INVESTMENT IN CLIMATE SOLUTIONS
Posted on August 7th, 2024
- Pensions Pool Border to Coast’s latest Climate Change Report outlines the progress made to date on reaching its ambition to be net zero by 2050 or sooner, including a continued rise in assets allocated to climate solutions.
- The pool reports engagement with companies representing 68% of the emissions covered by the Net Zero Roadmap, an increase of 20 companies from last year.
- Financed emissions from its investment portfolios have fallen 58% since 2019, putting the LGPS pool ahead of its interim target.
Border to Coast Pensions Partnership (‘Border to Coast’) continues to increase allocation to climate solutions on behalf of Partner Funds, demonstrating its progress in achieving net zero by 2050 or sooner.
In its latest Climate Change Report, Border to Coast reports £8bn of investment in climate solutions1 in its equity and fixed income portfolios (2023: £6.9bn), and £2.5bn deployed through its private markets programme. 
This includes capital deployed through its innovative private market Climate Opportunities proposition which has received a total of £2.6bn in commitments from Partner Funds.
The pool’s sixth report in line with the recommendations of TCFD, which became mandatory for Border to Coast as an FCA-regulated asset manager in 2024, also highlights:
- 70% of assets under management are now covered by Border to Coast’s Net Zero Roadmap.
- 38% of financed emissions are emitted by companies considered to be aligned or aligning with net zero.
- Enhancements to RI policies to reflect Border to Coast’s net zero commitments and production of its first Thematic Engagement Plan, which includes a programme of engagement focused on net zero transition.
“We invest for the long-term, and this makes managing the risks posed by climate change paramount. The transition to a net zero economy will require wholescale changes to how the economy and society functions, and it will require significant capital investment.
“The collective scale offered by pooling enables the development of innovative solutions that not only expand Partner Fund access to the investment opportunities involved in decarbonisation – through the likes of the innovative £2.6bn Climate Opportunities strategy – but also to provide the capital needed to fund the energy transition and support global net zero goals.”
The report includes the following case studies of investment in climate-related investment opportunities:
Greencoat UK Wind
One of our investments, Greencoat UK Wind, is the leading listed renewable infrastructure fund in the UK. As a wind farm investor, the company makes a positive contribution to the goal of achieving a net zero GHG emissions economy and limiting global warming. Greencoat UK Wind’s strategy has a singular focus, investing only in wind farms in the UK. In 2022 its investments generated 4,362GWh of renewable energy, powering 1.8million homes across the country. With almost 50% of its portfolio offshore, and a sizeable stake in Hornsea 1, one of the world’s largest offshore wind farms, Greencoat is one of the investors behind the UK’s status as a world leader in offshore wind deployment.
H2 Green Steel
Border to Coast’s Climate Opportunities strategy is supporting a hydrogen-powered steel furnace that will help to decarbonise industrial materials used in automotive, construction and white goods manufacturing. H2 Green Steel is building the world’s first large-scale green steel plant in Sweden. This innovative development replaces coal with hydrogen in the production of steel, reducing GHG emissions by 95% compared to a traditional blast furnace.
Our exposure is through a €100m commitment to the Clean Hydrogen Infrastructure Fund managed by Hy24, the world’s first investment manager fully dedicated to scaling up the clean hydrogen economy. Hy24 acted as a co-lead investor alongside a group of investors that backed H2 Green Steel with €1.5bn in late 2023 to finance the construction and development of the plant, which aims to start operations in 2025 and to employ more than 240 people.
Republic Services
Border to Coast invests in one of the United States’ largest waste disposal companies, Republic Services, which is taking action to reduce GHG emissions and promote the circular economy. It is working in partnership with oil and gas major British Petroleum (BP) to address the natural gas emissions resulting from the decomposition of waste material in landfill. It is innovating to capture these emissions and convert them into renewable natural gas that can displace society’s use of fossil fuels. This ‘biogas’ innovation is the centrepiece of Republic Services’ commitment to reduce GHG emissions with nearly 90% of its landfill acreage covered by biogas collection systems.
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