London Pension Fund Authority - divestment

Meeting: 
MQT on 2017-11-16
Session date: 
November 16, 2017
Reference: 
2017/4330
Question By: 
Caroline Russell
Organisation: 
City Hall Greens
Asked Of: 
The Mayor

Question

At the London Assembly Environment committee meeting on 13 September 2017, your Deputy Mayor for Environment and Energy said that the London Pension Fund Authority (LPFA) has agreed a policy of full divestment by 2020.  Could you provide details of how the LPFA is ensuring that the remaining companies with fossil fuel investments are divesting and adopting a business model consistent with the Paris Climate Change agreement goal of limiting warming to 1.5C?

Answer

Answer for London Pension Fund Authority - divestment

Answer for London Pension Fund Authority - divestment

Answered By: 
The Mayor

LPFA is currently undertaking a high-level review of the fund's holdings, due to be completed by the end of the year, which will identify the key features of the current position and prioritise targets/candidates for engagement on climate change in the year ahead.

The LPFA are looking to include a template in this report which can be used for all future meetings and which will demonstrate progress against targets and identify areas for further engagement. LPFA's investments in fossil fuel companies remain at very low levels and have seen a decrease of Assets Under Management from 2.2% to 1.3% over the first year of this administration. LPFA will also continue to hold passive holdings and bonds in some of the companies you have listed. This is because LPFA as part of their investment strategy are buying an indexed return which includes such companies.

However, they will use tools and methodologies available to assess how companies which they are invested in are undertaking management of their greenhouse gas emissions and of risks and opportunities related to the low-carbon transition, as well as international climate targets. The LPFA has committed to implementing this policy on climate change by 2020 including all necessary divestment required in line with the policy.