The London Pensions Fund Authority (LPFA) has allocated £250 million—representing 3% of its £8 billion portfolio—to a new climate-focused investment vehicle, in a major move to advance its net zero goals.
The capital will be managed by Local Pensions Partnership Investments (LPPI) through its newly launched Environmental Opportunities Fund, a private markets strategy targeting sustainable investments across infrastructure, venture capital, private equity, and natural capital.
The initiative aligns with LPFA’s pledge to achieve net zero portfolio emissions by 2050 and follows the guidance of the Institutional Investors Group on Climate Change (IIGCC). Under IIGCC’s Net Zero Investment Framework, institutional investors are encouraged to increase allocations to climate-positive assets such as renewable energy, clean technology, and reforestation.
“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,” said Jo Donnelly, CEO of LPFA, in a statement published by Net Zero Investor (April 2025). “I’m delighted to see us taking such a step forward in our net zero commitment.”
Since publishing its six-point net zero plan in 2022, LPFA has made consistent progress toward embedding climate action into its investment approach. A formal climate solutions target is expected to be announced soon.
Helena Threlfall, portfolio manager of the Environmental Opportunities Fund, noted the fund’s dual mandate to generate strong long-term returns while contributing to environmental outcomes. “This strategy allows us to access an evolving and diverse pipeline of investment opportunities that directly support the global climate transition,” she said.
The launch underscores a growing trend among UK pension schemes to shift capital into climate-aligned assets as both a risk management and opportunity-driven imperative.
Sources:
- Net Zero Investor, by Mona Dohle, April 2025: netzeroinvestor.net
- London Pensions Fund Authority (www.lpfa.org.uk)
- Institutional Investors Group on Climate Change (www.iigcc.org)
