Climate change, biodiversity loss and plastics pollution are among some of the most critical, existential issues facing humanity today.
In response, the Royal County of Berkshire Pension Fund has created a ‘responsible investment’ policy for 2022/23, which includes a focus on these issues and takes a direct approach to achievement using measured metrics to demonstrate success.
The policy also includes an inherent process aimed at increasing fund value alongside an increasing ‘green’ premium, and provides members and analysts with clear reports using critical metrics relating to climate change, biodiversity loss and plastics pollution. Keys to the long-term success of the policy are:
- the setting of key areas of focus, which also fall within the 17 United Nations Sustainable Development Goals
- the development of radical, but realistic, targets that allow us to discharge our responsibilities to future generations
- measurement of each of our investees’ performance against targets using defined metrics and methodologies
- reporting on performance against targets using clear, relevant metrics.
Additionally, through a process of continuous improvement, the policy is responsive to the changing landscape, new data, and new developments in metrics and methodologies.
We are engaging with investees on targets that include achieving net zero greenhouse gas emissions in line with the 2015 Paris Agreement and subsequent international agreements, including the setting of budgets that support limiting temperature increases to 1.5°C.
Other targets cover prevention of biodiversity loss – for example, by stemming current extinction-level losses, with the eventual aim of a role in biodiversity restoration – and minimisation, mitigation and avoidance of plastic pollution.
Pension fund professionals, fund managers and corporate managers crave a deeper understanding of their impact on key environmental, social and governance factors, such as climate change.
Our fund and key partners will look to include education and training as part of our engagement with investees and fund managers, to help them achieve and increase their green premium.
There is a long way to go before the tide turns, but we continue to aim for a greener pension fund.
- Cllr Da Costa is a qualified accountant and corporate treasurer