Pension fund plans £80m investment in renewable energy projects

Published: Friday, October 21, 2022

The council’s pension fund is planning to further reduce investments in fossil fuel-based industries and switch funding to green energy projects.

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It has announced plans to invest up to £80m in two energy transition funds based on non-traditional renewable projects such as battery storage and green hydrogen.

The Wandsworth pension fund, which also includes Richmond Council’s, said that, subject to due diligence, it intended to invest in the Octopus Energy Transition Fund and the Sandbrook Climate Infrastructure Fund. A maximum of £50m will be invested in one fund, with the total across both not exceeding £80m.

Finance department assistant director Paul Guilliotti said the fund already had significant investments in traditional renewable energy projects – involving generation – and was looking for strong returns and the opportunity to diversify its portfolio.

The Octopus fund will focus on hydrogen, the grid, storage, supply chains and local renewable generation, while the Sandbrook fund will focus on generation, the grid, storage, supply chains and energy efficiency.

Wandsworth’s total fund value is £2.6bn. It has set a net-zero target of 2050, with the goal of achieving a 60 per cent reduction in emissions by 2030.

It’s important the pension fund performs well and gives solid returns on investments - as any shortfall in funding would by law need to be made up by local council tax payers.

Wandsworth and Richmond councils operate a joint pension fund following the 2016 decision to combine the two sets of employees into a shared staffing arrangement (SSA) with a single workforce serving the two councils. The fund is supported by contributions from employees – with most members of staff contributing more than seven per cent of their salaries into the scheme.

The Chairman of the Joint Pensions Committee Cllr Norman Marshall said: “We continually strive to improve the performance of our pension fund so that it can fund our commitments without placing the burden on local taxpayers.

“Investing in renewable energy is not just good for the environment. It delivers a good return for the fund and will also help deliver energy self-sufficiency and security which is crucially important given the reprehensible actions of Russia in Ukraine.”