TfL Pension Fund urged to divest from fossil fuels as part of leadership in climate change fight

  • london
  • April 11, 2023
  • Comments Off on TfL Pension Fund urged to divest from fossil fuels as part of leadership in climate change fight

The call for action came from a cross-party committee of the London Assembly, which has published a report making the recommendation, among several others.

The Assembly’s GLA [Greater London Authority] oversight committee, which scrutinises City Hall’s activities and processes, said Mayor Sadiq Khan should encourage the TfL Pension Fund to report on and publish annual performance against its net zero targets.

The TfL Pension Fund operates independently of TfL.

TfL said “very significant progress” has been made by its Pension Fund to “embrace sustainability”

/ John Stillwell/PA

Padmesh Shukla, the TfL Pension Fund’s Chief Investment Officer, had told the committee that there was a place for some investments in the oil and gas industry, saying: “You can only go and push companies to do something, whether it is Shell or BP, if you are actually owning those companies. Once you leave the table, what is there?

“On the margin, it is better for responsible shareholders to be owning these companies and to make the right changes because, if we all divest, it is not making any real life impact because less responsible owners will hold the shares and probably they do not care about climate change.”

He added that having such investments formed part of having a “diversified portfolio” for the Pension Fund.

Leonie Cooper, GLA oversight committee chair, said: “There is a balance that must be struck when considering pension funds.

London Assembly member: Leonie Cooper

/ Tom Simpson/Greater London Authority

“Whilst it is essential that pension funds have a diverse portfolio of investments, it is also important, now more than ever, to consider the impacts specific types of investments have on the environment.

“Whilst we are in the midst of a climate emergency, we need to show strong leadership in the fight against climate change, and we believe that by divesting from fossil fuel investments, we send a clear message that we are taking this issue seriously.”

Responding to Ms Cooper and her committee’s report, a TfL spokesman said: “The TfL Pension Fund is independent of the Mayor and TfL, and its trustees are legally required to make decisions in the interests of its members.

“Since 2016, very significant progress has been made by the Fund to embrace sustainability in all investment and risk management activities. This has led to its “green” investments increasing from virtually nothing to more than £370m.

Padmesh Shukla, the TfL Pension Fund’s Chief Investment Officer, said investments in oil and gas companies were part of having a “diversified portfolio” of holdings

/ TfL

“In 2021, the Fund Trustees announced ambitious Net Zero Targets which would aim to deliver a 55 per cent reduction of the Fund’s Carbon footprint by 2030, increasing to 100 per cent by 2045 when compared to a 2016 baseline.”

As well as TfL, the committee’s report made pension-related recommendations to City Hall itself and four other bodies operating beneath it.

Ms Cooper, the Labour Assembly Member (AM) for Merton and Wandsworth, said: “There are some simple steps these organisations can take to be more transparent and to improve the lives of Londoners, by investing in the London Fund for example, which will improve housing and infrastructure across London.”