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Strathclyde Pension Fund

The Strathclyde Pension Fund administers the Local Government Pension Scheme (LGPS) in the west of Scotland for over 277,000 members, 152 participating employers and has investment assets of £28 billion.

Initial target disclosure: May 2023

Portfolio level

Portfolio level – Portfolio decarbonisation reference target

Baseline date: 2010  

Baseline performance:

  • 2,848,352 tCO2e
  • 241 tCO2e/$M invested

Target year: 2030 and 2050


  • Total Fund target to reach net zero greenhouse gas emissions across the Fund by 2050 or sooner
  • 2030 interim target of at least 45% absolute emissions reductions of Total Fund

GHG scopes included: Scopes 1 and 2 for all listed equities with Scope 3 to be included in due course.

Currently working with data providers to onboard Scope 3.

Asset classes in scope: Total Fund targets currently include active and passive public listed equity.

SPF intends to increase the scope of Fund targets to include all asset classes as data and methodologies improve.

Methodology/net zero scenarios: Total Fund target is consistent with delivering a fair share of the 45% or more global reduction in CO2 emissions by 2030 and net-zero greenhouse gas emissions across the Fund by 2050 or sooner (In line with IPCC  ‘Special Report on Global Warming of 1.5°C approved by governments’ in 2018).

SPF has used historic portfolio and MSCI data to establish the 2010 position for public listed equity as a baseline.

SPF has adopted the IIGCC Net Zero Investment Framework (NZIF) as the basis for its climate action plan.


Portfolio level – Investment in climate solutions target

Qualitative goal

Approach: SPF invests increasingly in the climate solutions required to achieve the overall goal of global net zero by 2050.

SPF has not yet set a quantitative target.

Further work is required to quantify the scale of climate solutions investment so that realistic goals and targets can be agreed.

These will include a <10-year goal for allocation to climate solutions representing a percentage of revenues or capex from AUM (based on EU taxonomy mitigation criteria) increasing over time in line with investment trajectories based on a net zero pathway.

SPF is already investing significantly in industries and companies that will deliver these solutions.

  • £1bn (3.5% of Total Fund) invested in JP Morgan Infrastructure Investments Fund (IIF) – with a one third allocation to renewable energy assets.
  • SPF’s inhouse Direct Investment Portfolio has committed over £500m to renewable energy infrastructure investments.

SPF Annual Report 2021/22 Investments – DIP – Section 6 – page 113-116

Asset level

Asset level – Portfolio coverage target

Baseline date: 2022 baseline for NZIF alignment

Baseline performance:

  • None of SPF’s active listed equity investments in high impact sector companies were assessed as being ‘aligned’ to a net zero pathway.
  • 16% by value were assessed as ‘aligning’ to net zero.
  • 42% by value were assessed as ‘committed’ to net zero.

Target year: 2026, 2030 and 2040 for NZIF alignment


  • 2026 target for at least 30% (by value) of directly held listed equities in material sectors meet the criteria to be considered aligning to net zero (as a minimum) as defined by the NZIF
  • 53% by 2030
  • 100% by 2040

30% aligning target by 2026 is based on a straight-line increase from the current 16% aligning to 100% aligned by 2040

Asset classes in scope: NZIF alignment currently includes active listed equity and Real Estate (30% of Total Fund value) – the portfolio coverage target is currently only based active listed equity.

To be expanded into passive listed equity, corporate fixed-income and sovereign bonds in due course – in line with NZIF.

Data sources: Climate Action 100+ Net Zero Company Benchmark; Transition Pathway Initiative; Data from the Science Based Target Initiative (SBTi) has also been utilised where applicable.

Asset level – Engagement threshold target

Target: Goal of at least 90% of SPF financed emissions in material sectors are either assessed as net zero, aligned with a net zero pathway, or the subject of direct or collective engagement and stewardship actions by 2030 or earlier.

Interim target of 70% as quickly as possible and certainly by 2026.

Additional information

Methodology: Carbon emissions (currently active and passive publicly listed equity representing 46% of Total Fund – to be extended to 100% of Total Fund as data and methodologies improve)

  • 2010 Baseline = 241 (tCO2e/$M invested)
  • 2020 = 171 (tCO2e/$M invested)

This sees a 29% reduction and is on track for the required 45% + reduction by 2030.

Third party analysis has verified that the total active global equity portfolio is estimated to be on track relative to the aggregated “fair share” pathway, with cumulative emissions to 2030 below budget. As per page 4 of  Climate Change Strategy – Climate Action Plan

Operational emissions: Glasgow City Council (GCC) is the administering authority for SPF – GCC has 2030 net zero target. The city has already achieved (and exceeded) its interim target of reducing CO2 emissions by 30% by 2020. Find details here.

Fossil fuel investment: SPF has developed an Energy Sector minimum standards framework.

The framework identifies energy sector holdings which are not adequately considering climate risk, the impact on their business, and how to transition towards a low carbon economy, recognizing the potential for ongoing policy and regulatory change.

The framework also aims to identify where there is a need to engage with a company on specific areas or consider divesting from a company.

Carbon foot printing analysis has considered the risk of ‘Stranded Assets’ in the Fund’s listed equity by calculating the total potential emissions from fossil fuel reserves as tons of CO2.

In 2020 the total potential emissions from fossil fuel reserves was 26.3 million tCO2e. (23.5% lower than that of the benchmark MSCI All Country World Index)

Climate Change Strategy – Assessment of Energy Companies; Climate Change Strategy March 2022

Additional information: In 2021, allocated £1.7Bn (7% of Total Fund) to the RAFI Fundamental Climate Transition Index Fund – delivered an initial 30% reduction in carbon intensity relative to market cap levels and a further 7% per annum thereafter.

SPF UK property portfolio represents 10% of total SPF assets. Target of operational net zero by 2040 and 50% reduction in carbon emissions intensity by 2030.

SPF’s Private Real Estate debt also targeting net zero by 2040 or sooner and 100% of relevant investments with SBTi-approved science-based targets by 2030, with an interim target of 50% by 2026.


Climate Action Plan March 2023; Climate Change Strategy – Climate Action Plan; Collaborative engagement initiatives that have a specific Climate Change remit are detailed in the Fund’s annual Stewardship Code Report and Climate Action Plan.

SPF has joined the IIGCC Net Zero Engagement Initiative.

SPF reports in line with the TCFD: SPF Annual Report 2021/22; Climate Change Strategy – TCFD – Section 5 – page 85-95