, 10 October 2016, Tags:
Please find below an open letter on Fossil Fuel Divestment to Lord Bob Kerslake, Chair of London CIV. The letter concerns the planned pooling of all London Local Authority Pension Funds into a new Collective Investment Vehicle (London CIV). It is from Andrew Johns and Rebecca Tully, Joint Co-ordinators, Waltham Forest & Redbridge Green Party.
To Lord Kerslake, Chair of London CIV
On Tuesday October 11th, all of the Pension Fund Chairs from London Boroughs will meet to discuss pooling at the Local Government Pensions Investment Forum. Waltham Forest & Redbridge Green Party are of course delighted that Waltham Forest has already made the historical commitment to divest entirely from fossil fuels. However, with the 2018 pooling of all London Borough Pension Funds just around the corner, we are concerned that future pensions in Waltham Forest will still contain a fossil fuel component, despite the borough's commitment to 100% divestment. We therefore call on London Councils to create a new, entirely fossil-free fund option in the new Collective Investment Vehicle (the pool for all London Borough pensions from 2018).
While we applaud the environmental policies of London Councils, we are concerned that unless pension portfolios are also changed, such policies will not be sufficient to address climate change and will create a very worrying future for current pension-holders and their families. There is abundant evidence that fossil fuel companies are in decline, severely compromising their ability to act as stable, long-term investments, while production of renewables is expanding and becoming ever more efficient and cheaper. Local Government Pension Schemes need to address the financial risks posed by climate change to council staff pensions and to ensure long-term economic and physical security for beneficiaries.
Following on from our recent open letter to Redbridge Council, calling for full divestment, we now call on London Councils to follow Waltham Forest’s lead by divesting from the top 200 companies with the largest known carbon reserves (oil, gas and coal) and shifting these funds to lower risk, ethical investments within five years. Respected organisations such as the Bank of England, the World Bank and HSBC have encouraged investors of all sizes to review the risks posed by continued investment in fossil fuel companies. Globally 595 institutions, controlling $3.4 trillion, have so far decided to divest from fossil fuels.
We believe that the financial risks of fossil fuel investments mean that it is essential that London CIV has a fossil-free fund. Given the shifts in both the national and international financial markets, it is both an economically prudent and ethically responsible offering. London Councils have a tremendous opportunity to lead the country and the rest of Europe in placing fossil free finance at the heart of local government pension schemes.
Andrew Johns, Rebecca Tully
Joint Coordinators, Waltham Forest & Redbridge Green Party