East Sussex Pension Fund, Lewes, England, hired Storebrand Asset Management to manage its £400 million ($529 million) fossil fuel-free allocation to passive equity, according to a spokeswoman at the fund's adviser, Hymans Robertson.
The £4 billion pension fund invests half of its 40% listed equity allocation with a ESG focus, said the spokeswoman.
Ten percent of the ESG equity allocation will be in the Storebrand Global ESG Plus fund. The pension fund also allocates 5% of its ESG equity assets in WHEB Sustainability Fund and 5% in Wellington Global Impact Fund, managed by Wellington Management, the spokeswoman said.
Funding came from the termination of UBS Climate Aware fund, which had 5% of the ESG allocation, following a review, the spokeswoman confirmed. No reason was given for the termination.
"Investing in generic passive indexes, while a perfectly acceptable part of any pension strategy, tends to weight exposure to older and often more carbon-intensive incumbents over which no investor due diligence has taken place. Such an approach sits less well with heightened due diligence around ESG risks. ESPF is very pleased to partner with Storebrand as a part of its strategy to address these challenges," Gerard Fox, East Sussex councillor and pension fund chairman, said in the news release.
Pension fund officials could not be reached for further information.