Council pension investments switching to renewable energy

Published: Monday, February 28, 2022

The pension fund operated by Wandsworth and Richmond Councils is playing a leading role among London local government funds in switching its investments to renewable energy.

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London Council pension funds are in the process of investing over £600 million in renewable energy, it was announced this week.

All of the funds are managed by local authority pension pool, London CIV, the organisation which is tasked with managing the assets of pension funds for the 32 London Boroughs plus the City of London Corporation. One of the biggest individual investments will come from the combined Wandsworth and Richmond pension fund which has already invested £40 million in these assets, but aims to increase this commitment to £140 million in the next year.

Cllr Guy Senior, Chairman of the Joint Wandsworth and Richmond Pension Fund said: “We came to the conclusion in 2020 that maximising the performance of the fund and supporting the council’s pledge to tackle global warming did not have to be mutually exclusive.

“Switching to environmentally friendly investments has been a gradual process, but our equity portfolio is already over thirty per cent below the carbon footprint for its benchmark.”

He added: “Investing in renewable energy is not just about being green, it will help deliver energy self-sufficiency and provide a good yield to pay our pensions so it is a win-win situation all around. The various types of renewable energy we are considering include carbon capture and energy storage and if all of the funds were invested in power generation such as hydro, solar, and wind turbines, it could generate up to 10 per cent of London’s total requirements in electricity and do so in a greener capacity.”

Mike O’Donnell, CEO of London CIV said: “We are delighted Wandsworth and Richmond are investing such a significant amount in renewable energy, which includes our recently launched Renewable Infrastructure Fund. The rest of the £600 million investment has been made up by another nine London Borough Local Government Pension Scheme investors.”

“London CIV has committed itself to achieving net zero Green House Gas emissions by 2040 becoming the first local authority pension pool to do so. By setting an ambitious target it sends a clear signal to all our clients, managers and investee companies about urgently addressing this increasingly material issue.

“Our strategy ensures that the range of funds we offer are suitable for all our clients’ climate goals, such as those highlighted by Wandsworth. We want to ensure that in collaboration with all of our partners we can help our Client Funds achieve their emissions targets, however ambitious they may be”.