Pensions & benefits

Climate change, ESG and sustainable investment

We incorporate climate change and sustainability considerations into our advice across investment, funding and covenant, helping our clients to manage risks and improve outcomes.

It is common sense to promote strong real-world environmental, social and governance (ESG) practices – events in the real world impact you, and your decisions impact your members and the wider world.

Beacon

Helping trustees and pension scheme sponsors better manage climate risks and opportunities

Beacon is an intuitive tool that helps pension scheme stakeholders better understand and engage with climate risks and opportunities, providing clear actions that are tailored to their unique circumstances.

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Responsible investment survey

Responsible investment has been at the forefront of many investors’ minds over the last few years. Our report looks at how investment managers deliver on their responsible investment claims.

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Responsible investment philosophy

Our responsible investment philosophy sets out how we will be bold with our advice to help our clients manage risks, improve outcomes and communicate clearly to their stakeholders.

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We use our scale and influence to make our clients’ voices heard, by engaging with fund managers, insurers and policymakers to tackle systemic risks that no single investor can manage alone.

To help amplify our voice, we have developed a headline set of “climate policy asks” to guide our influencing work in this area.

15 clients (and counting) have supported our “climate policy asks”.

Climate change poses a material financial risk. Not only are there physical risks, but it could be increasingly priced into financial markets. This would affect the outcome of your decisions on funding, investment and covenant – and the experience of your members for years to come.

We will help you assess risk in each of these areas and identify clear actions:

We encourage our clients to align their investment strategy with net zero emissions by 2050.
We provide clear and practical recommendations to help clients monitor and achieve this – our technology includes climate dashboards to help understand carbon exposure in an accessible way.
We help our clients understand the potential impact of climate risks on their journey plan through a combination of training, scenario analysis and narrative.
We integrate climate into our assessment of covenant strength to ensure our clients benefit from a holistic assessment of risks and how these may interact.

We will also help our clients to capture long-term opportunities, for example, by identifying investments that are well placed to deliver strong returns and drive the global transition to a low carbon economy. We are unique in being able to harness the expertise and insights of our specialist energy team LCP Delta, who are at the heart of the energy transition, so clients can tap into this megatrend in an intelligent way.

Our approach has led to the development of LCP Transform – where we help our clients with the journey from understanding what the energy transition is, to how to get invested and set an investment strategy that can benefit from this megatrend.

We also help clients manage a broader range of ESG risks, whether that’s engaging existing investment managers, selecting new managers or assessing potential insurers as part of a transaction – we are proud to be a founding signatory to A4S’s “Sustainability Principles Charter for the bulk annuity process”.