Pension fund moves away from fossil fuels

Published: Thursday, May 20, 2021

The council’s pension fund has begun the process of reducing its investment in fossil fuels. 

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It has started progressively decreasing investment in UK stocks and shares, instead focusing on global investments which are less carbon-heavy, and has confirmed that new investments must comply with the fund’s new decarbonisation pledge.  

The Fund agreed last year to reduce investment in stocks and shares by five per cent and invest more in renewable energy funds.  

It has transitioned its equity into new investments such as LGIM Future World Global Fund and committed to the London CIV Renewable Infrastructure Fund in addition to investment in the JP Morgan Infrastructure Fund which invests significantly in solar and wind projects. 

The fund is run jointly by Wandsworth and Richmond councils and is one of the top three best-performing local government schemes in the country. It is self-financing, which means it does not rely on taxpayer top-ups. 

Chairman of the Joint Pensions Committee Guy Senior said: “We continually strive to improve the performance of our pension fund and get the best value we can for staff members without placing any burden on taxpayers.  

“We came to the conclusion last year that maximising the performance of the fund and supporting the council’s pledge to tackle global warming did not have to be mutually exclusive.  We have set the target of reducing investments in stocks and shares by five per cent, but we will continue to review this as we suspect it will make economic sense to reduce it still further.

“Switching to environmentally-friendly investments will be a gradual process in order to minimise risk, but our equity portfolio in January was already thirty per cent below the nationally-set carbon footprint benchmark. 

“We will continue to hold our fund managers to account to ensure they consider the social environmental and ethical performance of a company when deciding whether or not to invest in it.” 

Read more about what the council is doing to tackle climate change.