Could the Mansion House Accord make climate adaptation investible?

It’s been just over a year since seventeen of the UK’s largest pension investors signed the Mansion House Accord. The voluntary agreement is aimed at deploying 10% of defined contribution default funds in private markets by 2030, with UK investments accounting for half of the funds invested.

Analysis Cushon, from one of the signatories, and the University of Exeter is urging pension schemes to channel their Mansion House capital towards a new frontier – climate adaptation.

Private Markets and Portfolio Construction | 5 November 2026 | Central Court, London

Investing in adaptation

According to the government’s latest stocktake, Mansion House Accord signatories have thus far invested 6.6% of growth-phase default funds in private markets, 3.3% of which is in the UK. Crucially, some £3bn has been committed but not deployed in UK deals.

Martin Logan, sustainability manager at Cushon, reckons these are signs of momentum. “Providers already have £11.1bn at work in UK private markets, which is a strong start, and the £3bn pipeline shows momentum is building”, he says.

Achieving the Accord’s deployment targets will mean exploring new investment horizons. Cushon’s thesis is that climate adaptation is a good place to start.

“The next opportunity is resilience. Funding infrastructure and assets that can cope with a changing climate opens up long-term value creation for members and for the UK economy”, Logan explains.

The research Cushon and the University of Exeter jointly published shows how physical risks are not only financially material but also an immediate concern.

The research highlights cases such as East Anglia, where low-lying topography is exposed to extreme weather such as floods and droughts. The region is also home to energy infrastructure and agricultural land – both of which sit within institutional real asset portfolios.

As an asset owner, Cushon’s takeaway from the research is that physical risks are material to the world members retire into – a factor that shapes the pension provider’s approach to risk management.

“The investment case is becoming harder to ignore. Physical climate risks are already affecting UK assets, while the pipeline of pension-scale adaptation opportunities remains underdeveloped”, Logan notes.

Adaptation Inc.

According to the research, the investment opportunity is spread across themes such as climate resilient infrastructure, heat protection, flood resilience and natural capital.

For Cushon, the latter has been a particular point of focus. Last year, after signing the Accord, Cushon committed 2% of its sustainable investment strategy to the Aviva Investors Carbon Removal Fund – a product focused on natural capital.

Deploying pensions capital into adaptation is a more challenging proposition than mitigation investments. “Pension capital is well suited to long-term challenges, but the market needs clearer data, stronger project pipelines and policy support”, says Jesse Abrams, senior impact fellow at the University of Exeter and a co-author of the report.

As an example, the research highlights the case of outcome purchase agreements – the adaptation equivalent of the government’s Contracts for Difference (CfD) scheme. The CfD incentivised institutional investors to back renewable energy projects by reducing price uncertainty and stabilising returns for investors.

To make adaptation investible for pension schemes, the research calls for similar instruments. “In the same way that many pension schemes now house renewable infrastructure within their portfolios, allocations to adaptation could help to reduce the impacts that nations are already seeing from climate change”, the report concludes.