RPMI Railpen, London, plans to deliver a net-zero portfolio by 2050, it said Wednesday.
The goal for its portfolio is a 50% reduction in greenhouse gas emissions by 2030 and net-zero emissions by 2050 or sooner, according to a news release by RPMI Railpen, which runs £32 billion ($45.1 billion) of assets on behalf of the railway pension funds.
Its Net Zero Plan aligns with the goals of the Paris Agreement, U.K. policy and legislative goals, and other recommendations. It is based on the Net-Zero Investment Framework of the Institutional Investors Group on Climate Change.
Railpen’s net-zero plan will cover public equities, corporate fixed income and sovereign bonds, which account for 65% of the portfolio. It will include real estate, private equity and infrastructure holdings between now and 2022, as IIGCC methodologies develop, Railpen said.
The Railpen release said that its net-zero road map for decarbonizing its portfolio is primarily through corporate engagement, with active ownership being the key. Its current engagement target is with companies responsible for 70% of material financed emissions; by 2030 that will increase to issuers contributing 90% of material emissions.
Michael Marshall, head of sustainable ownership, said in the release that climate change is “the single biggest financial and global hazard of our time. We recognize the central role asset owners can play in driving change.”
Railpen CIO Richard Williams added: “We have a fiduciary duty to secure our members’ futures. We believe that climate change is financially material across all major asset classes. In support of our duty, the risks and opportunities presented by climate change can be mitigated and benefit from asset allocation, individual investment decisions and purposeful stewardship.”
