London CIV, a pool of London local authority pension funds, has pledged to reduce carbon emissions of its portfolio to net-zero by 2040, according Jacqueline Jackson, head of responsible investment.
In the interim, London CIV is also targeting a 35% cut in carbon emissions of its portfolio by 2025 and a 60% reduction by 2030 across the £12.9 billion ($17.7 billion) in assets it oversees for London pension funds, the fund said Tuesday.
In 2022, London CIV said, it will also calculate the carbon footprint of its passive funds with £13 billion in assets and devise a detailed road map to achieve net-zero emissions.
London CIV's approach is to focus on engagement with portfolio companies and reducing the emissions of its investee companies, Ms. Jackson said in an email.
"In the future, we may also need to look at innovative funds that contribute to negative emissions in order to get there," she said.
Ms. Jackson added that divestment "would only be used in a last resort escalation for extreme situations in which a company will not take action, set transition targets or robust strategies within appropriate timescales. By which point we could perceive it to be a critical financial risk for London CIV and our clients."
Separately, money manager Robeco pledged Wednesday to reduce the carbon emissions of its portfolios by 30% by 2025.
By setting a new interim target, Robeco aims to achieve progress toward its earlier goal to cut emissions by half by 2030, which it announced in December 2020.
To meet the new interim target, Robeco said it will invest in companies that will thrive in the transition to a low-carbon economy and engage with companies that are slow to move to a low-carbon economy.
Robeco will step up its active ownership activities through voting and engagement, focusing on 55 companies that are responsible for 20% of the firm's portfolio emissions as well as intensifying its dialogue with sovereign bond issuers.