The Scottish Borders Pension Fund has made its first allocation to natural capital assets, with a commitment to Nuveen’s Global Timberland strategy.

The investment, of which the value remains undisclosed, is the latest step in the pension fund’s increased drive towards decarbonising its portfolio and seeking investment solutions targeting both positive environmental and societal outcomes alongside attractive and resilient returns.

The Scottish Borders Pension Fund is part of the national Local Government Pension Scheme (LGPS) and has assets of c.£900m with investments spanning across both traditional and now more alternative asset classes. It represents the interests of local government employees and other related organisations in the Scottish Borders geographic area.

Commenting on the investment, Scottish Borders Council Pension Fund chair and councillor, David Parker, said: “The pension fund’s core objective is to provide our end investors with stable returns and we are increasingly putting their capital to work to drive positive environmental and social outcomes. The Nuveen Global Timberland strategy and its investment philosophy is fully aligned with these ambitions and will help us in our journey towards a more sustainable portfolio.”

The Nuveen Global Timberland strategy seeks to provide consistent, long-term risk-adjusted returns and regular income yields through a portfolio of high-quality timberland assets. Sustainability is at the heart of the strategy’s investment philosophy and provides investors with standardised carbon reporting.

Nuveen UK institutional business development, Matthew Hamber, described the pension fund’s investment as a “milestone” for the strategy. He said it is “further indication that UK institutional investors see the full range of benefits of allocating to natural capital as an asset class”.

This story has also been published on our sister title's website, Pensions Age.

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