Hackney Council has agreed to scrap more of its pension fund’s fossil fuel investments as it follows up on a pledge to halve them by 2023.
The Town Hall’s Pension Committee this week approved plans to invest £325 million – roughly 22 per cent of its assets – in two environmentally responsible funds.
The committee says it has also “significantly reduced” the pension fund’s exposure to the FTSE Allshare Index – where it is most susceptible to fossil fuel companies.
The move follows a review of the financial risks posed to the the fund’s fossil fuel investments in light of the Paris Agreement – a commitment from 195 countries to stop the global temperature rising more than two degrees Celsius this century.
Campaign group Divest Hackney, which has been putting pressure on the council for four years, welcomed the announcement but reiterated its desire for a “truly fossil free fund”.
Cllr Robert Chapman, chair of the Town Hall’s Pension Committee, said: “Climate change is probably the greatest threat facing humankind.
“That’s why, last year, the Hackney Pension Fund committed to reduce its exposure to fossil fuel reserves by 50 per cent, reducing the fund’s exposure to carbon risk and aligning it with the two degrees scenario set out in the Paris Agreement.
“These new changes to our equity portfolio represent a significant step towards achieving this target and reflect our long term ambition to move away from fossil fuel investments.”
Divest Hackney’s Camilla Zerr said: “These moves toward funds that are lower carbon and more socially responsible are a welcome step in the right direction. But it’s only a start.
“Hackney Council admits that climate change is most likely the greatest threat facing humankind yet they continue to justify divestment commitments that are neither large enough, nor fast enough to tackle the problem of climate breakdown.”
Zerr said Arctic temperatures rising above freezing in February for the first time ever and the recent UK snowstorm are “more proof that bold action on climate change is needed right now”.
She added: “The only divestment commitment that makes sense is a truly fossil free fund – not just 50 per cent fossil free – and within the next four years, not some time in the distant future.
“Southwark Council is doing this. It’s made the commitment to go 100 per cent fossil free and is investing in these lower carbon funds. Why can’t Hackney?”
In November last year, Cllr Chapman said: “The pension fund’s long-term ambition is to move away from fossil fuel investments, and I can foresee a time when our fund will have no fossil fuel investments.”