Islington Council pension fund makes major move to cut carbon footprint

The fund has adopted an approach to make sure the financial security of the scheme’s 21,000 members, including 6,600 pensioners, is not put at risk by investments in fossil fuels, such as coal and oil, as the world moves away from a carbon-based economy.

Also Islington Council Pension Fund has joined 350 investors in signing the 2018 Global Investor Statement to Governments on Climate Change, reiterating full support for the Paris Agreement and strongly urging governments to take the actions needed to achieve the agreement’s goals.

At its most recent meeting, the council’s pensions sub-committee agreed the following targets:

* To reduce by May 2022 the fund’s exposure to carbon emissions (as measured by the weighted average carbon intensity) by more than half, compared to when it was last measured in June 2016

* To reduce by May 2022 the fund’s equities’ exposure to fossil fuel reserves by more than three quarters, compared to when it was measured in June 2016

* To invest by May 2022 at least 15 per cent of the fund in sustainability-themed investments (eg low carbon technology and renewable infrastructure)

* To decarbonise not just the fund’s equities, but also its holdings in other asset classes, where possible

* To continue to engage collectively with companies in which we invest through the London Collective Investment Vehicle (LCIV), to urge them to reduce their carbon footprint and their reliance on fossil fuels

These moves follow a commitment to decarbonisation made in September 2018, and earlier steps to reduce the fund’s carbon footprint, including moving passive equity investments to track low carbon indices.

Immediate next steps for the committee include the following:

*Investing in a renewable infrastructure fund

* Investigating further opportunities for decarbonisation in respect of the passive equities currently managed in-house

Cllr Dave Poyser, Chair of Islington Council’s Pension Fund, said: “Our fund is at the vanguard of the global decarbonisation movement, and we have taken another major step to reduce its exposure to carbon.

“Over the next four years, we will build on our existing work to reduce the fund’s carbon footprint, which has already significantly reduced the fund’s investment in fossil fuels and lowered our carbon emissions. Our new overarching policy and investment strategy statement, agreed this week, will guide the fund’s journey towards decarbonisation.

"The pension fund’s approach will protect scheme members and pensioners, as investments in fossil fuels become more risky, and will also help to protect the planet.”

For full details of the Pension Fund Committee meeting on November 26, see Islington Council website