Islington Council's Pension Fund is aiming for net zero emissions by 2050, aligning with the Intergovernmental Panel on Climate Change's 1.5 degrees Celsius warming scenario.

The Islington Council Pensions Committee convened on Monday 30 June 2025, to discuss the fund's decarbonisation policy, investment strategy, and overall performance. Councillor Paul Convery, Chair of the Audit and Risk Committee and the Pensions Committee, presided over the meeting, which included discussions on environmental, social, and governance (ESG) factors, investment targets, and the transition to sustainable investments.

One of the key objectives is to reduce the carbon intensity of all listed portfolios, including equities and credit, by 15% by 2026 and 26% by 2030, using a 2021 baseline. According to the Pension Carbon Monitoring Report, as of March 2025, the fund had already achieved a 48% reduction.

The committee also set a target to invest at least 20% of the fund in sustainability-themed investments by the end of April 2026. As of March 2025, the fund had already reached 40% in this area. These sustainability-themed investments include low carbon technology or green infrastructure.

To achieve these targets, the fund is transitioning its In-House UK equity portfolio to third-generation climate indices. This transition is expected to enable achievement of the fund's short to medium targets. The committee is also realigning its emerging markets portfolio. The committee will also continue to engage with our portfolio managers including the London CIV to improve ESG ratings and achieve the targets set and long-term net zero target for the whole fund.

Roles and responsibilities of Administering Authorities (AAs) and pools in investment strategy and implementation.
Roles and responsibilities of Administering Authorities (AAs) and pools in investment strategy and implementation.Source: Pensions Committee papers, 30 June 2025

According to the LGPS Consultation Outcome Report, administering authorities will set out local investment allocation targets as part of the Investment Strategy Statement (ISS) and report on the impact of local investment within their Annual Reports. The Pensions Investment Review Final Report stated that the government expects all assets to be transferred to pools by 31 March 2026. The report pack mentions government recognition of barriers around property stamp duty on transfers to the pool, with discussions between HMRC and pools to resolve these issues. It also mentions that the 2023 Procurement Act places restrictions on pool-to-pool collaboration, which will be addressed in the pending Pensions Bill.

The Pension Carbon Monitoring Report outlined new metrics, including Implied Temperature Rise and the percentage of the portfolio with science-based targets initiative (SBTi targets), to align with the Taskforce for Climate-related Financial Disclosures (TCFD) framework. The report pack includes a table describing 'Implied Temperature Rise' as a metric, stating it is a Prediction of temperature rise scenario over the rest of the century, given a company's emissions, commitments, and momentum. The '% of portfolio with SBTi targets' is defined as A measure of how many companies in a portfolio have submitted climate transition plans that have been approved by the Science Based Targets Initiative (SBTi).

The Pensions Committee Forward Plan includes a standing item on performance and the LCIV, ensuring ongoing monitoring and strategic adjustments.