<!-- Swiftype Variables -->

ECONOMY

Southwark Pension Fund to divest fossil-fuel investments

Divestiture illustration

London Borough of Southwark Pension Fund will divest from fossil-fuel companies, the Southwark Council agreed at a cabinet meeting Tuesday.

Following the divestment decision, the £1.2 billion ($1.5 billion) pension fund intends to reallocate undisclosed assets into sustainable energy infrastructure via the London CIV pool, of which it is a member.

“The commitment to cut pension investment in fossil fuels long term, agreed last night at cabinet, is a measured and carefully considered decision based not only on ethical practice and the council’s continued drive to reduce exposure to fossil fuel, but also on reducing the financial risk of investing in traditional energy sources, which will ultimately become obsolete,” said Fiona Colley, cabinet member for finance, modernization and performance at the council, in a news release.

“We are a long-term investor, aiming to deliver a truly sustainable pension fund,” Ms. Colley added.

Ms. Colley was not available to comment by press time on the size of divestment or a time frame for implementing the decision.

The pension funds current target asset allocation is 50% equity, 20% property, 10% passive index-linked gilts, 10% diversified growth funds and 10% absolute-return bonds, according to its asset allocation strategy last updated in December 2014.