Brunel Pension Partnership, Bristol, England, achieved its target of reducing the carbon intensity in its active portfolios by 7% in 2019.
The pension pool, which brings together local government pension scheme funds representing about £30 billion ($37 billion) in assets, aims to lower carbon intensity relative to its active benchmarks by 7% every year until 2022, its first Responsible Investment and Stewardship Outcomes report said.
The report, published Friday, said the pool had measured the carbon footprint of its portfolios for the calendar year 2019, against scope 1, 2 and 3 emissions, which cover different types of direct and indirect greenhouse gas emissions.
Brunel's aggregate portfolio, a customized portfolio representing the pool's investments, had a 9.4% exposure to fossil-fuel revenues vs. 12.4% for its benchmark. The benchmark was not named.
Further, the aggregate portfolio has a lower exposure to coal within its energy mix at 25% vs. 30% in the benchmark portfolio, and has a high allocation to renewables: at 9% vs. 2% for the custom benchmark, the report said.
The pool's Brunel active U.K. equity portfolio, which had £6.2 billion in assets according to a spokesman, reduced its weighted average carbon intensity by 28.5% between March 2018 and December, to 259 tCO2e/mGBP — a measure of emissions per million pounds sterling invested.
On the topic of gender diversity, 35% of board members at companies included in the U.K. active equity portfolio are female.
The responsible investment report said 35% of Brunel's cycle 1 private market investments were in renewable energy. Cycle 1 private markets renewables investments include off-shore wind, some onshore wind, solar and storage, with a geographical focus on Europe, the spokesman said.
A January update for the 2019 calendar year said the fund had invested around £1.3 billion in assets.
The pool's executives carried out 867 engagements with companies last year, focusing on issues including plastics pollution, cybersecurity and animal welfare.
Brunel also outlined next steps for its investment portfolios and practices focusing on a number of topics.
Climate change-related focuses for the future include developing the climate and carbon metrics reporting "to demonstrate progress and real-world outcomes." Executives will also "reflect on the lessons learned from the ongoing COVID-19 crisis in addressing our work on climate change," the report said.
Regarding cost transparency, pool executives will work to consider the impacts of the coronavirus pandemic on its engagement related to tax and transparency with the companies in which it invests.
On diversity and inclusion, executives will work to improve the percentage of female representation on boards for each of its active investment portfolios. It also aims to improve the amount of data available on diversity and inclusion through work with its data and engagement providers.
For its focus on cybersecurity, Brunel executives will prioritize engagement with telecom and internet companies on governance, privacy and "objectionable content" where a company's overall performance and progress is behind that of its peers.
