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The Mayor of London, Sadiq Khan, is taking action to divest London’s pension funds from fossil fuel industries and he wants organisations across sectors to follow.
What is divestment and why is it necessary?
Divestment is the opposite of investment – it means getting rid of assets that are invested in companies that are extracting fossil fuels as sources of energy and contributing directly to climate change.
The Mayor has ambitious plans for London to be a zero carbon city by 2030. Achieving this will require action across the board from cleaning up London’s transport network, to supplying the capital’s homes and workplaces with clean renewable energy. It also requires organisations of all kinds to rethink financial investments that support fossil fuel industries.
Action is required on both a local and global level to end the financial support for fossil fuel companies that are directly engaged in extracting coal, oil and natural gas as sources of energy.
Divestment in London
The Mayor has worked with the LPFA (London Pension Fund Authority) on a climate change policy covering combined assets of just under £10 billion. This agrees to no longer consider new active investments in fossil fuel companies and for the fund to implement this policy on climate change by 2020, including all necessary divestment.
The Mayor is also calling on London boroughs to follow his lead and divest from fossil fuels.
Green investment
At the same time as encouraging divestment, the Mayor is calling on the LPFA and organisations across London to scale up green investments by pension funds. Pension assets have the potential to fund the low carbon transition and can play an important role in helping London, and the rest of the world, scale up climate projects and pursue a zero carbon pathway.
Global city network
In September 2018, Sadiq and Mayor of New York, Bill de Blasio announced they will be co-chairing C40 Cities Divest/Invest Forum. This is the first forum of its kind aimed at expanding fossil fuel divestment globally. It provides the opportunity for mayors and other city leaders to share the knowledge and tools proven to accelerate divestment. The forum will also draw upon expertise of city leaders and external financial consultants to develop joint solutions to the challenges presented by divestment. Participating cities include Paris, San Francisco and Oslo.
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