In a strategic move that underscores its accelerating push toward net zero, the London Pensions Fund Authority (LPFA) has pledged 3% of its £8 billion portfolio—approximately £250 million—toward investments in environmental solutions. This allocation will seed a newly launched private markets fund to support global decarbonisation efforts through climate-aligned assets. But this isn’t just a one-off gesture. It’s part of a much broader financial and philosophical commitment.

The LPFA doesn’t manage its assets in isolation. Its investments are pooled with those of the Lancashire County Pension Fund and the Royal County of Berkshire Pension Fund via the £27 billion Local Pensions Partnership Investments (LPPI) platform. The climate solutions fund marks LPPI’s eighth pooled investment vehicle, joining an existing lineup that spans global equities, fixed income, infrastructure, private equity, real estate, credit, and alternative assets.

According to LPPI, ongoing strategic discussions with its partner funds are already bearing fruit. The group targets a combined initial commitment of £500 million to the climate solutions strategy—an aggressive first step toward a deeper systemic impact.

While the investment itself is significant, it’s also symbolic. LPFA, which committed back in 2021 to becoming a net-zero fund by 2050, is on the verge of announcing a formal climate solutions target—a requirement under the Net Zero Investment Framework created by the Institutional Investors Group on Climate Change (IIGCC).

The forthcoming target is informed by the IIGCC’s recently published Climate Solutions Guidance, which LPFA and LPPI have closely studied in developing their approach. According to LPFA, this guidance, in tandem with insights from its collaboration with LPPI, has helped pave the way for a more structured and measurable path toward climate-positive investing.

The new LPPI fund is open-ended and exclusively focused on private market assets—a domain known for its long-term horizon and transformative potential. The investment thesis targets three primary themes:

• Climate Mitigation – Investments that directly reduce greenhouse gas emissions.

• Climate Adaptation – Solutions that help communities and industries adapt to the changing climate.

• Nature-Based Solutions – Projects focused on restoration, conservation, and sustainable stewardship of ecosystems.

By weaving environmental ambition with fiduciary responsibility, LPFA is doing more than chasing returns—it’s helping to redefine responsible pension fund investing in the age of climate urgency.

Jo Donnelly, chief executive officer of LPFA, said: “The impact of climate change poses a financial risk to pension funds like ours, so we’re taking climate action to protect our members’ pensions.

“Our net zero commitment means engaging with our existing investment managers to reduce portfolio emissions while also backing companies that support the transition to a low-carbon future.”

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