Lothian commits to responsible investment principles

Lothian Pension Fund has adopted a new statement of responsible investment principles, including targets to assess the carbon intensity of all assets by the end-2022 reporting cycle.

The £8 billion local government pension scheme signed up to the six Principles for Responsible Investment (PRI), an organisation which supports and enables asset owners and asset managers to work collaboratively towards RI best practice.

The principles include incorporating environmental, social and governance issues into investment analysis and decision-making processes, with the scheme outlining an ambition to appoint managers who will not provide new financing to companies or projects that are incompatible with the aims of the Paris Agreement.

Lothian Pension Fund’s Chief Investment Officer, Bruce Miller, said that while the scheme’s statutory Statement of Investment Principles incorporated elements of its approach to responsibility, it felt that it was in the interests of members to be transparent in the methods it uses to foster responsible investment as an organisation.

“We’re very clear that our primary responsibility is to be able to pay the future pensions of our members, but it’s important to all stakeholders that we invest in a manner that the average member sees as fair and reasonable,” he added.

The scheme also committed to climate monitoring and reporting as part of its intention to communicate its activities and progress towards implementing the principles.

David Hickey, a European equity manager at Lothian Pension Fund, has led on the firm’s overall approach to responsible investment since 2015.

Hickey said: “Climate change is undoubtedly one of the defining issues of our time. LPF has recognised this in our actions in recent years, with co-filing a successful climate resolution at BP last year, and in joining collaborative engagement effort Climate Action 100+ where we have become a key part of the team engaging with Finnish utility company Fortum.”