The London Pension Fund Authority (LPFA) is the largest pension fund in the capital and manages £4.8 billion on behalf of more than 80,000 people.
While the LPFA is progressive as pension funds go, it still has £37 million indirectly invested is some of the world’s biggest fossil fuel polluters including Shell, BP, Chevron as well as other companies involved in the Canadian tar sands. This is on top of the tens of millions of pounds directly invested in polluting companies.
We know that urgent action is needed to prevent catastrophic climate change, and these companies are standing in the way of meaningful climate legislation to protect their profits - it’s time institutions like the LPFA took a stand and broke their ties with the industry.
Divest London therefore calls on the LPFA to publicly commit to:
Immediately freezing any new investment in the top 200 publicly-traded fossil fuel companies.
Divest from direct ownership and any commingled funds that include fossil fuel public equities and corporate bonds within 5 years.
LPFA fund members join here!
The fossil fuel divestment movement is rapidly growing around the world as more and more institutions take a stand. From the Canberra Local Government to the Norwegian Pension Fund, large institutional investors are ditching the fossil fuel industry.
Climate change is the most significant threat to our long term health and prosperity. The impacts of climate change - including flooding, heat waves and crop failure - are already being felt around the world.
We need to leave 80 per cent of fossil fuel reserves in the ground to even have a chance of avoiding a dangerous two degree warming scenario. Currently, the world is heading for a catastrophic five degree warming. Urgent action is required.
City Hall has considered the impact of climate change on Londoners, from flooding to heatwaves. The impacts of the ‘Carbon Bubble’ on the London economy are significant, not to mention the 9,500 deaths caused by air pollution every year. City Hall’s conclusion is that the LPFA must ditch companies involved in fossil fuels.
The legal purpose of the London Pension Fund is to pay the pensions of London’s workers - from council employees, to nurses, to tube drivers - to safeguard their future. It makes no sense to use their pensions to fund the very companies that are destabillising this future.
Investing your savings in fossil fuel companies profits from and exacerbates the damage wrought by climate change. The LPFA knows this: Mike Taylor, its former chief executive, even acknowledged that:
"We also need to do our bit for the planet rather than destroy it."
The moral case for action is compelling. The financial case for ditching fossil fuels is also clear. Financial players including HSBC, the World Bank and the Bank of England increasingly warn of the financial risks associated with fossil fuel investments.
The falling price of renewables, increasing costs of extraction and growing government action to prevent catastrophic climate change, are making fossil fuel companies unfeasible long-term investments. This has been recognised by investors from the Rockefeller Brothers to Goldman Sachs executives.
Divestment avoids this risk, and opens up the opportunity of reinvestment in the green economy, as the London Assembly Economy Committee has recommended. The UK’s low carbon goods sector has been steadily growing at 4.8 per cent, even during the recession.
In London specifically, the sector is worth approximately £25.4 billion to the capital’s economy. Divesting from fossil fuels opens up investment opportunities in a growing sector.
We know the LPFA cares about climate change and has taken some important steps to mitigate its impact, including investing £106 million in renewable energy and cleantech, and conducting carbon footprinting of its portfolio. But given the scale of the challenge ahead, and the obstacles these companies are to progress, we need bolder action across the whole of society if we are to succeed.
Beyond the moral and financial risks, the LPFA also risks the reputational stigma of funding catastrophic climate change. Research shows that organisations heavily criticised in the media have their reputation tainted, with subsequent impacts on shareholders, members and the board.
It’s time the LPFA put its money where its mouth is and joins other institutions in committing to divest from fossil fuel companies.
Gradual divestment is not a rash move, nor a political luxury to be taken at the expense of hard-working LPFA members. It is the logical response to the recklessness of fossil fuel companies, that both reflects the LPFA’s core values, and will secure the viability of the fund in the long term.
The LPFA’s slogan reads ‘Your pension, Our world’. By maintaining investments in fossil fuel companies, it’s helping neither.
Divest London is a citizens’ movement demanding meaningful climate action from institutions across the capital.
Please join us in calling for the London Pension Fund Authority to divest from fossil fuels.
Sign the petition calling on the LPFA to divest from fossil fuels