IMPACT Awards 2023

Pension fund of the year; Award for impact reporting (asset owner): Greater Manchester Pension Fund

Greater Manchester Pension Fund (GMPF) local investment portfolios has commitments of £828 million ($1 million) in an impact-themed portfolio and £535 million in the Greater Manchester Property Venture Fund, with £858.7 million drawn down as of 31 December 2022.

GMPF invited The Good Economy (TGE) to review its local investment portfolios. The social advisory firm carried out an independent review of the funds' approach to local investing and impact ambitions.

Winning the award for impact reporting by an asset owner, this review was recognised by IMPACT judges as what is thought to be the first report of its kind – and the first time a pension fund has asked for independent assurance of sustainability information being reported by underlying funds.

The assessment combines an analysis of GMPF's investment portfolio data, case studies, and verification work that assessed the place-based impact investing practices of a sample of GMPF's fund managers.

The outcomes were measured by:

  • Portfolio-level analysis: This involved analysing data provided by external investment managers regarding underlying investment portfolios.
  • Three case studies were conducted, featuring investment managers to illustrate the nature of GMPF's investments and their impacts, combining quantitative and qualitative data.
  • Data assurance: A critical step in the assessment process was assessing a sample of information provided by investment managers using sustainability assurance standard AA1000, a standard created by independent consultancy AccountAbility. This assessed the quality and reliability of place-based measurement, management, and reporting, as well as jobs data.

As a result, TGE made the following recommendations to GMPF to enhance its impact strategy.

  • Greater focus on social inclusion, for example, invest more in social and affordable housing.
  • Focus not only on job growth but also investing in skills development and job opportunities for young people and job quality.
  • Increase investment in renewable energy, social infrastructure, and social investment, which have had relatively lower allocations.
  • Integrate place-based impact investing considerations into the due diligence and fund selection process.
  • Encourage investment managers to develop an impact management approach and monitor and report consistent impact data.

"By understanding what impacts are being achieved from our local investments, our aim in publishing this report is to hold ourselves accountable for the continual improvements we seek to make. We hope to encourage other investors to scale up their local and impact investments by sharing our experience and working with others looking to contribute to sustainable economic development across the UK," commented councillor Gerald Cooney, chair of GMPF.

Since the inception of the impact portfolio, GMPF reports the following impact, correct as of 31 December 2022:

  • 18,300 jobs supported (31% locally – Greater Manchester and Northwest UK);
  • 60 businesses demonstrated job growth (46% locally);
  • 7,574 jobs created (37% locally);
  • 47 apprenticeships offered (94% locally);
  • 91% of jobs are paid above the Real Living Wage;
  • 9,975 jobs to be supported through new employment space created (68% locally);
  • 4,395 new homes – completed, in development or planned (60% locally); and
  • 13 renewable energy and other sustainable infrastructure assets.

The impact themes of the portfolio are primarily 'jobs' and 'place'. The target size for the Impact allocation is 2% of the main fund value, which totalled £28.1 billion, as of 31 December 2022.

GMPF is the largest fund in the UK's Local Government Pension Scheme and the eleventh biggest defined benefit pension fund in the UK.