The City and County of Swansea Pension Fund has made a £40m commitment to the Stafford Carbon Offset Opportunity Fund to help transition its investment portfolio to net zero by 2037.
The Article 9 impact fund will look to invest in afforestation (new forest creation), natural forest restoration and improved forest management projects on a global basis. The fund was launched in December 2022 with a $1bn (around £827m) fundraising target and is managed by private markets and advisory group Stafford Capital Partners.
The fund will deliver an investment with a substantially negative carbon intensity profile and reporting framework that can support the broader decarbonisation objectives of the £2.7bn Local Government Pension Scheme (LGPS) fund’s investment portfolio.
Jeff Dong, deputy section151 and head of pension fund, told Room151: “We are pleased to announce this further step towards the fund’s ambitious objective to reach net zero emissions by 2037.
“The decisions we take day-to-day make a real difference and our efforts so far were recognised last year when the fund won the ‘Best Climate Change Strategy’ local authorities pension fund investment award. We are determined to do more and will continue working towards achieving our 2037 net zero target and the fund’s wider climate objectives.”
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The fund is expected to invest in 200,000 hectares of sustainably managed timberland and generate 30m in verified carbon offsets for investors, which are each equivalent to 1 tonne of CO2. The Article 9 fund is also expected to provide a source of sustainable, low-carbon wood raw materials.
Stephen Addicott, Stafford Timberland’s managing partner, told Room151: “We are delighted to welcome the City and County of Swansea Pension Fund as an investor in our new carbon offset and sustainable timberland fund.
“It is an honour to win the support of a scheme that has one of the most comprehensive and ambitious decarbonisation strategies globally. We look forward to delivering to its members and supporting the scheme’s broader transition to net zero.”
We are pleased to announce this further step towards the fund’s ambitious objective to reach net zero emissions by 2037.
Almost $242m committed by LGPS
Alongside Swansea, Essex Pension Fund and Leicestershire Pension Fund have also invested in the carbon offset fund, with commitments of £100m and £55m respectively.
According to Stafford Capital Partners, $242m (around £200m) has been committed at initial close of the fund by investors from the LGPS.
Angus Whiteley, CEO of Stafford Capital Partner, said: “We believe this fund will deliver the important combination of potential financial returns and environmental benefit that is so needed today.
“We are very grateful to the investors who have enabled us to achieve this milestone and look forward to making a meaningful contribution to their decarbonisation agenda.”
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