Responsible Investments

Approach and principles

The Hampshire Pension Fund is part of the national Local Government Pension Scheme (LGPS).

It is responsible for paying the pension benefits of over 200,000 current and future pensioners. The Pension Fund Panel and Board (PFPB), who are responsible for the management of the Pension Fund, have agreed a Responsible Investments (RI) policy for the Fund’s investments. This policy takes into account the views of scheme members and employers, including those who responded to the Pension Fund’s RI consultation in 2022 and RI survey in 2025.

The Pension Fund believes that RI considerations are important, particularly over the longer term to protect and enhance long-term investment return and for its reputation with scheme members, employers and the wider Hampshire community. All RI considerations are important but the Fund views the impact of climate change as a key risk to the Fund and therefore its primary RI priority.

The Pension Fund has committed to its investment having net-zero greenhouse gas emissions (which includes Scope 1, 2 and 3 emissions) by 2050 at the latest.

The Pension Fund supports the objectives of the Paris Agreement to limit a global temperature rise this century to well below 2⁰C (which we take to be 1.5⁰C).

The Pension Fund Panel and Board have therefore agreed to actively work towards disinvesting from fossil fuel investments.

The Pension Fund also wants to make investments that make a positive contribution and the Panel and Board has agreed targets for 30% of the Fund’s alternative investments to be sustainable or impact investments by 2026.

Working towards disinvesting from fossil fuels

In a small minority of cases where the Pension Fund holds illiquid (such as private equity) fossil fuel investments, it will not immediately dispose of these investments, if this results in a poorer financial outcome for the Fund and its beneficiaries.

Fossil fuel companies still exist in investment indices and where the Pension Fund has chosen to invest in index-tracking investments, it may still have exposure to fossil fuel companies. The Pension Fund will work with its investment managers on the options for index-tracking products that reduce their exposure to fossil fuel companies and/or follow ‘Paris-aligned’ objectives that reduce the overall carbon footprint of the investment.

Hampshire invests in partnership with other Local Government Pension Scheme pension funds (via the ACCESS pool) and therefore there must be collective agreement to changes to investment portfolios to exclude fossil fuels, which it is actively pursuing.

Where Hampshire can independently or with its partners, agree to exclude fossil fuel companies from its investments, it will typically be based on the following standard definitions of a fossil fuel company:

• Fossil Fuel Production: Companies that derive +10% of revenue from the extraction and production of fossil fuels (oil, gas and thermal coal).
• Fossil Fuel Ownership: Companies that own +10% of assets in fossil fuel reserves (coal, oil and natural gas).
• Fossil Fuel Activities: Companies that derive +10% of revenue from oil and gas related activities including distribution, retail, equipment and services, extraction and production, petrochemicals, pipelines and transportation, thermal coal mining.

In the short-term, while the Pension Fund continues to hold fossil fuel related investments, it will continue to engage with the relevant companies through its investment managers, to promote the transition to a low carbon economy.

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