The UK’s Environment Agency Pension Fund has earmarked up to £250m (€313m) for a new “evergreen” equity mandate, incorporating ideas for a long-term investment portfolio that considers the impact of non-financial matters on return.The £2.4bn local authority pension scheme (LGPS) said it was tendering for one or more sustainable equity managers that would be expected to outperform the benchmark over a three to 10 year basis, managing mandates worth £75m-250m.The tender noted that the contracts for pooled or segregated mandates could be extended “indefinitely” subject to the asset manager’s satisfactory performance based on both financial and non-financial matters.Mark Mansley, CIO of the EAPF, told IPE that the fund had not decided on a specific target benchmark, but could imagine using an established mainstream or absolute return benchmark index. Faith Ward, the fund’s chief responsible investment and risk officer said the mandate was a key part of its 25% allocation to sustainable assets. “It is based on our extensive market research and discussions with the market on the ‘Mandate of the Future’. From this we know there are some very good managers out there and we look forward to receiving their submissions.”The EAPF’s tender comes after the UK’s Law Commission found that UK trustees were able to take account of non-financial matters when reaching investment decisions and follows on from calls by the Kay Review of equity markets to lengthen the term of equity mandates.Mansley said that while the inclusion of non-financial considerations might have previously been seen as “pushing the boundaries” of fiduciary duty, the situation had changed in the wake of the Law Commission report.“We now feel that the Law Commission made it quite clear that what we are doing is central within the concept of fiduciary duty.”While the fund had initially intended the agreement would act as a framework accessible to the entirety of the local government pension market, Mansley said that the framework would have resulted in further complications.He also questioned how much demand there would be for such a framework in light of the recently concluded Department for Communities and Local Government (DCLG) consultation that was investigating if local authority funds could reduce management costs by shifting to passive mandates.“We are going to capture what opportunities we can for collaboration out of this, particularly if we end up looking at pooled fund vehicles, or perhaps end up identifying pooled funds that other LGPS might be interested in participating without going through the tender process.”The EAPF said that up to 15 asset managers would be taken forward to a full tender process, with requests for proposals due by 24 September. It will select the final asset managers by early next year.