Northern LGPS has thrown its weight behind climate change goals set out by the Paris Agreement as it published its responsible investment policy.
The investment pool signalled its intent to bring pressure on its portfolio companies in pursuit of broader environmental, social and governance (ESG) policies.
Among its goals is a commitment to make all its assets compatible by 2050 with the net zero-emissions ambition outlined in the Paris Agreement.
It will also disclose how it will vote on investee companies prior to any votes, in what it claims is a first among major UK institutional investors.
Paul Doughty, newly appointed chair of Northern LGPS, said his pool was “determined to be at the forefront of responsible investment”.
“Our assets are invested to fund the retirements of hundreds of thousands of people living in the North and beyond. We will always act in their interests, which is why we want all of our responsible ownership activities to make a positive contribution to the regions where they live,” he said.
“We will be demanding high standards from the businesses in which we invest and will focus our activity on aiding the creation of good jobs, protecting our environment and enhancing infrastructure.”
Publication of the responsible investment policy comes amid increasing pressure for the Local Government Pension Scheme (LGPS) to invest responsibly.
Last year climate change activists made repeated calls for local government pension funds to divest from polluting companies, though many in the sector believe engagement is a more effective means of tackling climate change.
The government’s scheme to restructure the LGPS into pools was also intended to create economies of scale, allowing investment in UK infrastructure. However, the government has repeatedly emphasised returns should remain the first objective of the LGPS.
Alan MacDougall, managing director at the financial consultancy PIRC, said: “The policy sets out the strong regional focus of Northern LGPS and emphasises significant ESG themes such as climate change and employment standards.
“There will be a particular engagement focus on large holdings, and those that pose significant ESG risks to Northern LGPS.”