This is one of a number of short blogs I am producing , reporting on the issues dominating the PLSA’s Local Authority Pensions Conference being held between Cirencester and Cricklade in the Cotswolds Water Park.
Till recently, LGPS was thought of as a quiet pensions backwater, by many in private pensions, but recent events , especially the implosion of the private sector DB asset base, requires a revaluation of what the Local Government Pension Scheme is about.
In this blog I report on a talk given by Lauren Juliff of Norwegian insure Storebrand.
A big difference between LGPS and other conferences is that everyone is in the room.
My first impression of this conference is that the room is too small #LAconf23 . It’s a credit to delegates that there is no standing room! pic.twitter.com/fw9q1m7O6g
— Henry Tapper (@henryhtapper) June 26, 2023
A packed room on a hot day got calls from delegates for a climate transition in the room!
More seriously, the quality of the debate on how Local Government Pension Schemes track the carbon emissions of their investment was of a greater technical expertise than anything I have previously listened to.
The concern is that the existing Scope parameters are not sufficient to adequately track progress towards alignment with the Paris Accord.
More is needed to ensure the unintentional consequences of including legitimate climate friendly initiatives in portfolios, which inadvertently boost the emission record under Scope 3
Scope 4 is being brought in to properly represent the replacement of old technologies by new. The example given was replacing boilers with Heat pumps . Storebrand thought this critical to the just transition,
Questions from the floor were equally involved.
David Crum of Minerva asked whether we could draw a parallel between into the use of science based targets for emissions and the now discredited credit ratings which masked underling failures which led to the financial crash in 2008. There is passion around these measures
Discussion on this subject continued well into the evening as delegates ate together. It is really encouraging that a body of pension professionals considers its duty to make our money matter with this avidity.
The challenge now is to translate this conversation out of a hot and crowded room in the Cotswolds, into the awareness of members of LGPS schemes who may in time come to consider their pension investments part of the answer to the climate crisis.
Please don’t dismiss me as a client change denier , but I personally find scope 1, 2 , 3 and now 4 hard. I am worried about scope creep – where will it end?
What is needed is the grounding given the subject by firms such as Storebrand who bring the theoretical arguments back to impact assessments that I can understand.
It was a helpful session. I learned that you cannot set and forget carbon emission monitoring and that an active engagement with what is going on in your portfolio is not just a nice to have , but am imperative if “Paris alignment” is not to become just another missed target.
