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TURNING AMBITION INTO REALITY: BORDER TO COAST PUBLISHES ‘ROADMAP’ TO ACHIEVING NET ZERO BY 2050

Posted on October 5th, 2022

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Border to Coast will continue to reduce greenhouse gas emissions, invest in climate solutions, and support a global Net Zero future for, and on behalf of, its 11 LGPS Partner Funds.
The publication marks an important step forward for Border to Coast, providing a clear, target-driven roadmap to 2050 as responsible global investors.
Border to Coast calls for urgent collaborative action across industry and wider society to help turn global ambition into reality.

Border to Coast Pensions Partnership (“Border to Coast”), one of the UK’s largest pension pools, today launches its Net Zero Implementation Plan detailing how it will address the systemic risk of climate change, drive reductions in real world carbon emissions, and reduce its carbon footprint to Net Zero by 2050 or sooner.

The ‘roadmap’ marks an important step in Border to Coast’s journey to Net Zero as the representative of 11 Local Government Pension Scheme (LGPS) Funds with c.£60bn in assets*. It demonstrates how Border to Coast will continue to leverage its collective scale and influence to proactively engage with companies to decarbonise and create investment propositions aligned with net zero emission goals. It will also deliver increased opportunities for its Partner Funds to invest in climate solutions and collaborate to improve data and reporting across the investment industry.

The plan is aligned with the global goals of the Paris Agreement and follows the Net Zero Investment Framework (NZIF) set by the Institutional Investors Group for Climate Change (IIGCC). Its publication comes a year after Border to Coast formally committed to the 2050 goal and joined the Net Zero Asset Managers’ Initiative.

“While the road to Net Zero will not be short or easy, we cannot let the scale of the challenge be an excuse for inaction. Our detailed plan sets out the clear role we will have in supporting a low carbon future. To have a real impact and make a real difference we need strong and coherent collaborative action from investors, policymakers, regulators, and businesses to make sure that the global ambition for Net Zero does indeed become a reality.”

Rachel Elwell, Chief Executive Officer, Border to Coast

In setting a clear path to Net Zero by 2050, Border to Coast recognises the urgent need to mitigate the risk climate change poses to investment outcomes and Partner Funds’ ability to pay sustainable pensions to more than one million beneficiaries in the coming decades.

The plan sets clear and ambitious targets. It targets a 53% reduction in financed emissions across its portfolios by 2025 and a 66% reduction by 2030, reaching Net Zero by 2050 at the latest.

Currently, 60% of the £38.3bn of assets Border to Coast is responsible for are covered by the plan’s emission reduction targets. Border to Coast will continue to work with industry to improve data quality and methodologies to enable the remaining 40% – comprised of private market and some fixed income assets – to be brought into scope over time.

The plan builds upon the significant progress Border to Coast has made as a long-term responsible investor to date:

Reduced the carbon emissions of its portfolios by 50% on 2019 levels by 31 March 2022.
An estimated £6.8bn of assets in the scope of the plan are invested in climate solutions with an additional £600m committed in private markets.
Launched a dedicated Climate Opportunities portfolio, supporting further private market development of climate solutions, with £1.35bn in Partner Fund commitments.
Implemented a standalone Climate Change Policy and strengthened its voting approach towards companies failing to make progress on Net Zero.
Joined a £400bn-strong investor group committed to supporting a low-carbon and just transition in emerging markets.

Mark Lyon, Deputy Chief Investment Officer, Border to Coast, said: “Driving real reductions in global carbon emissions will be key to combatting climate change and delivering the long-term investment outcomes our Partner Funds need. Strong and consistent engagement will help us achieve this. Our scale and capabilities mean that we are well equipped to influence real change at companies and within the wider investment industry, as well as to support the development of new solutions to the climate crisis. Our plan brings together all the tools available to us and sets us on a clear path to a Net Zero future.”

Engagement with portfolio companies, external asset managers, and data providers is an important element of Border to Coast’s plan. Alongside ambitious targets for carbon emission reductions, Border to Coast has also set strong engagement and alignment targets to enable it to measure progress and monitor the proportion of companies committed to a Net Zero pathway. The pool aims to engage with 100% of portfolio companies within scope by 2030 – with a focus on the highest emitters posing the greatest risks – to ensure 100% of portfolio companies are aligned to Net Zero by 2040.

Read our Net Zero Implementation Plan in full here.

*Approximate total assets across all 11 LGPS Partner Funds as at 31 March 2022.

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