LPFA sets a goal of 5% to be invested in climate solutions by 2030

• c. £400 million goal marks Fund’s completion of a major net zero objective  

• Opportunities include energy efficiency, renewable energy, sustainable industry, transportation, reforestation and wetland restoration 

London, 17 June 2025 

The London Pensions Fund Authority (LPFA), an Administering Authority and £8 billion Local Government Pension Scheme (LGPS) fund with over 100,000 members, has committed to an initial goal of investing a total of 5%, or c. £400 million1, of the Fund’s current value, in climate solutions.  

The c. £400 million represented by the goal is based on an existing holding of c. £150 million in existing climate solutions assets that the LPFA has within LPPI’s equity and corporate fixed income holdings and includes an additional c. £250 million announced in April 2025, which saw the LPFA adjust its Strategic Asset Allocation and make a specific allocation to Environmental Opportunities to arrive at the 5% goal. 

Guidance from the Institutional Investor Group on Climate Change has historically defined climate solutions as (IIGCC) as including ‘activities, goods or services that contribute substantially to or enable emissions reductions to support decarbonisation in line with credible 1.5˚C pathways towards net zero’. The term includes a diverse range of investment opportunities such as energy efficiency and renewable energy, sustainable industry and transport to reforestation and wetland restoration projects. 

The economic benefit of net zero was recently highlighted in report by the UK’s Confederation of British Industry. In their January 2025 ‘The Future is Green’ report, the CBI states “Between 2023 and 2024, the [net zero economy] sector grew 10.1% and now generates £83.1 billion in Gross Value Added (GVA), with £28.8 billion directly from net zero businesses and £54.3 billion from supply chain activities and broader economic contributions. This robust performance underscores the sector's multiplier effect, with every £1 of value generated by the net zero economy creating an additional £1.89 in the wider economy”. The move by the LPFA aims to ensure that the Fund capitalises on investment opportunities presented by the net zero economy.  

According to Jo Donnelly, CEO of the LPFA, “Net zero is a strategic priority for us and investing in climate solutions is a vital part of that strategy. It’s about ensuring that we invest in opportunities that help us pay members their pensions when they retire. We are pleased to be able to commit to a goal combining existing investments and a specific allocation to Environmental Opportunities. Fund investments do evolve, of course, but we are clear about the opportunities that exist in a low carbon future.”   

According to Paul Hewitt, Responsible Investment Manager for the LPFA, “To set this initial goal, we’ve used current IIGCC guidance to identify existing listed equity and corporate fixed income assets that can be described as climate solutions. We’ve then built on that to reach the full 5% goal. 

"It’s worth pointing out that, until last week, there's been no definitive guidance on how to approach classifying Infrastructure or Real Estate assets as climate solutions. This means, that our actual investments in this area are likely to be much higher. For example, through our investment in GLIL, we’re invested in projects like Hornsea 1, one of Europe’s largest windfarms. While 5% is a great start, we’ll be revising our targets as we get to grips with the new guidance and as the climate solutions market evolves.”  

Setting a climate solutions target is required of pension funds committing to net zero under the Institutional Investor Group on Climate Change (IIGCC)’s Net Zero Investment Framework (NZIF). The LPFA made a net zero commitment in 2021.  

Note to Editors 

About the LPFA 

The LPFA is a defined-benefit LGPS Pension Fund and Administering Authority with c.100,000 members, 115 active employers and £8 billion of assets (as of 31 March 2024). The Fund’s assets are fully pooled via LPPI, together with those of the Lancashire County Pension Fund and the Royal County of Berkshire Pension Fund. The LPFA and Lancashire County Council are also shareholders of the Local Pensions Partnership which comprises LPPI and pensions administrator, LPPA. LPPA administers the LPFA Fund. The LPFA is a signatory of the Climate Action 100+, a member of the LAPFF and is a participant in the C40 Cities Divest/Invest Forum. The LPFA made a Net Zero commitment in September 2021. 

Contact us

For further information, please contact Alistair Peck or Evelina Miller on communications@lpfa.org.uk