Sustainability has been a key driver of EAPF’s investment strategy for over 20 years, having conceived its approach in 2023 with its first investment with an environmental overlay made in 2005. Its commitment since then to innovative, sustainably focused portfolios across all asset classes has delivered strong financial returns and has contributed to EAPF being a fully funded scheme for the last eight years.

Given that EAPF’s members come from a predominantly scientific background, their searching questions informs the fund’s investment decisions and direction. This is key to ensuring that its approach to managing climate change and biodiversity – areas that are now very much at the heart of its strategy - is science-based.

EAPF has set a target of getting to net zero by 2045. This commitment is part of its long-running efforts to significantly reduce the emissions from the companies in its investment portfolio, while also continuing to invest in green solutions. The strategy is designed to support its strong, long-term funding position.

The ambitious decarbonisation objective is backed by a science-based plan using data from the Intergovernmental Panel on Climate Change (IPCC), with interim targets to ensure it’s on track. The fund is already ahead by nearly five years in terms of emission reductions. Moreover, when setting its net zero target, it calculated that it had already reduced emissions from its listed equity portfolio by 74% in the last decade, while growing the value of its investments by 94%.

To grow and complement its climate risk strategy, EAPF recently shifted some of its focus to biodiversity. Indeed, it now considers natural capital as a standalone asset class with a strategic 4% allocation.

One of the first steps in developing this new portfolio was to link its approach to tackling climate change with that on nature and biodiversity loss. It believes that reducing carbon emissions, building resilience to a warming climate and protecting and enhancing nature and biodiversity are inter-linked and should be tackled in parallel.

EAPF’s aim is for the natural capital portfolio to be eventually net-nature positive and deforestation free. When seeking investments, it looks for a baseline scientific assessment alongside regular environmental monitoring and reporting of biodiversity metrics to understand their impact.

An example of the strategy in practice is one of its underlying asset managers in South America placing beehives in its orchards during avocado and cherry blooming seasons. This allows the bees to feed and sustain their hives from native vegetation after the blooming period, supporting hundreds of millions of the insects.

Elsewhere in South America, EAPF is investing in a nature-based project in Paraguay to convert degraded grazing land into a sustainably managed forest with a guaranteed 25% minimum set aside for natural regeneration. The internal due diligence on this project lasted over a year and it was a steep but informative learning curve for EAPF. The investment, as well as delivering financially, comprises planting approximately 60 million trees, which is estimated will result in the sequestration of approximately 18 million tonnes of carbon dioxide [per annum?]. The project is already monitoring and protecting 27 endangered, threatened and protected species including the greater rhea and puma and is expected to create 3,000 direct and 30,000 indirect jobs.