Hackney Council will decide next week whether to start withdrawing from all investments in fossil fuels from its pension funds.
The council have already pledged to remove half of its funds from fossil fuels over the next six years, and at the final investment strategy meeting on 29 March may commit to withdrawing all of the £42 million invested in non-renewable energy sources.
Divest Hackney started campaigning on the issue just over two years ago. Gabriel Davalos, a member of the group, told Hackney Post: “We’re very disappointed that they’re going half way and they’re not taking that extra step and really stepping up to be a leader in the city and frankly in the country.”
For Davalos, “there isn’t really time for half-way measures.”
— Divest Hackney (@divesthackney) March 22, 2017
A public petition on the issue has gained over 1,800 signatures. Davalos said the campaign has had support from MP for Hackney North and Stoke Newington Diane Abbott. Caroline Lucas, MP for the Green Party, has also indicated her disappointment that the council has only removed half of the funds it has in fossil fuels.
Other London councils Waltham Forest and Southwark have already committed to completely divesting. Earlier this month Hammersmith & Fulham Council announced it is ending investments in coal, oil and natural gas companies just one week after a campaign was launched urging it to do so.
Davalos believes the council can divest without breaking their fiduciary duty to pension fund members. He said: “pension funds throughout the UK have lost millions of pounds on non-renewable energy companies over the past five years,” pointing to the coal industry and the volatility of oil prices.
He said: “If there’s no effect on the performance of the funds, they are entitled by law to take ethical matters into consideration like climate change”.
He also believes that as the amount invested in fossil fuels is only four percent of the total, it is “totally feasible” to move all of it elsewhere.
Cllr Robert Chapman, Chair of the Pensions Committee, said there is a risk that “investments in fossil fuel assets become ‘stranded’, which means that they’ll lose their value as a result of necessary world-wide action against climate change.” This represents “a threat to our pension fund”.
He added: “The fund’s long-term ambition is to move away from fossil fuel investments, and I can foresee a time when our fund will have no fossil fuel investments. Our ambitious target to reduce the funds exposure to future CO2 emissions by 50 percent is the first step on that journey.”
Chapman noted however that: “Our first responsibility is towards those whose pensions we manage as well as other stakeholders, which include local council taxpayers. We have to ensure that the pension fund receives the best returns possible.”
— Caroline Lucas (@CarolineLucas) March 21, 2017
Davalos is hoping for a firmer commitment at the meeting next week.
He said that it has been “hard to speak to pension fund members themselves” and at “a time when the councils are going through heavy cuts [divestment is] not always the key issue” on their minds. However, he said he thinks the members the campaign has spoken to have been “broadly supportive” of the campaign.
Davalos said: “Regardless of what the decision is on the 29th, we’re going to continue to campaign for them to go all the way”.
Divest Hackney discovered the total amount the council has invested in fossil fuels through a Freedom of Information request. Davalos said the group aims to raise “public awareness throughout the borough” about the issue. They have held film screenings and distributed flyers.
He said: “We’ve had a good relationship with Hackney Council” and that councillors “are really taking this issue seriously”.
The group has talked to the council’s pension committee several times and has attended all their meetings since it launched the campaign.
Hackney Council said its pension committee “is taking further steps towards a fossil free pension fund after approving ambitious plans to cut the fund’s exposure to future CO2 emissions.
“The fund expects to move away from fossil fuel investment in the longer term.
“Significant steps towards greener investments were made including the investment of £20 million, with an additional £5 million in February, into a ‘Low Carbon Workplace’ fund, which transforms office buildings into energy efficient, low emission workplaces.”