The Fund considers risk from climate change as a financial risk. Therefore, climate change is one of the key focus areas from an investment perspective.
The Fund believes that climate change creates both investment risks and opportunities for the Fund’s investments and that there is a need to advocate for an orderly transition to a climate resilient economy.
Considering the best financial interests of the members, the Fund has set a target of net zero across all investment portfolios by 2030.
The Fund officers monitor climate risk on an ongoing basis. This is through a combination of:
- Divestment from various oil and gas companies (historical approach in case of segregated equity investments)
- Allocating to renewable energy infrastructure
- Allocating to newer decarbonisation focused assets and climate solutions
- Ongoing engagement with portfolio companies through investment managers
- Working with investment managers to evolve their approach on decarbonisation
- Transparently reporting our progress
Since September 2017 (baseline) the Fund has monitored and reported:
- reduction achieved in carbon footprint (Scope 1 & 2 emissions) of the overall portfolio across all asset classes
- progress in transitioning investments from legacy non-low carbon assets to mandates with decarbonisation-focused targets and initiatives (based on an internal classification)
Discussions on carbon footprint of the Fund’s portfolio is a standing agenda item at every quarterly PAP meeting.
The Fund will continue to be transparent about the progress achieved over time on decarbonisation efforts across the portfolio and its net zero goals.
As a responsible asset owner, the Fund will also consider other material ESG considerations as part of its investment decisions. Some of these parameters include natural capital, human rights, employee diversity, etc.
Where possible, the Fund has developed standalone policies focused on these material ESG considerations.
The Fund has a standalone Diversity, Equity and Inclusion policy aimed at advancing these parameters internally as part of Fund operations and also outlining the Fund’s approach to considering them as part of engagement with external stakeholders.
The Fund will consider other ESG parameters as the investment landscape evolves. Additionally, the Fund will also consider monitoring and reporting progress on such material ESG parameters as data availability and coverage increases and best practices develop over time.