London Borough of Waltham Forest Pension Fund will divest from fossil-fuel investments over the next five years.
The agreement was made Thursday.
The £735 million ($955 million) pension fund had 2.2% of its investments exposed to fossil fuels as of March 31, said Councilor Simon Miller, chairman of the pension fund committee, in an e-mail. “A decision to divest from fossil fuels is therefore neither radical or in any way inconsistent with our wider investment strategy.”
Over the next five years, executives at the fund will identify how it can invest in a way that “achieves the policy objectives without adversely impacting our investment targets. We are clear that such investment opportunities exist and will be working with our advisers to identify the best opportunities for the fund going forward,” he added.
Executives at the fund will be searching for “suitable fund managers that can deliver our investment return objectives over the next five years,” including for a new commitment agreed in June to allocate 5% of the fund’s equity portfolio to an ethical strategy.
“The government’s requirements for local authority pension funds to invest through pools means that we will also expect suitable investment opportunities to be identified by the London collective investment vehicle,” one of the pooling options available to England and Wales’ 89 local government pension scheme funds, which will pool their assets by 2018. Mr. Miller added that executives are aware that the London CIV is already looking at sustainable equities as an investment theme.
Fossil Free, an international divestment movement, said in a news release Friday that the pension fund was the first local government pension scheme to commit to divesting from all fossil fuels.
“Waltham Forest Pension Fund is proud to commit to divesting from fossil fuels,” said Councilor Simon Miller, chair of the pension fund committee, in the release. “Not only does this mean that the fund will not be invested in stranded assets, but will be actively investing in cleaner, greener investments to the benefit of our community, borough and environment.”