Paper petition details
Divestment from Fossil Fuels
This Paper petition was received on 13/04/2018.
1109 people signed this Paper petition.
This is a paper petition received by the council. It has never been available for signature online.
Council response
Re: Petition for Divestrnent From Fossil Fuels
No decision was taken to formally adopt the petition as tabled,
however Council members appreciate the risks of carbon investing
and steps have been taken to reduce investment in carbon
industries.
Following consideration of your petition, the meeting resolved that
the petition be referred to me as Corporate Director, Resources for
a written response.
In response to the points raised in your petition:
1. Immediately freeze any new investments in fossil fuels -
specifically, in the top 200 publicly-traded fossil fuel companies
with largest known carbon reserves (oil, coal and gas) - made by
Tower Hamlets Council Pension Fund or Tower Hamlets Council
Since 2017, the Pension Fund's equity exposure has reduced from 60%
to 50% and those funds have been transferred to multi asset funds
with lower exposure to carbon intensive assets. Remaining assets in
the equity portfolio have been substantially moved from UK equities
into a Low Carbon index tracking portfolio aiming to reduce tie
carbon exposure by 70%. In overall terms between 30th March 2017
and 30th March 2018, the fund reduced investments in oil and gas
through a number of investment changes which is estimated to have
reduced tie fund's carbon exposure from 12% to 3% of the amount
invested in equities.
2. Divest from direct ownership and any co-mingled funds that
include fossil fuel public equities and corporate bonds within 5
years;
The Government is actively encouraging pooling of pension
investment funds and the council actively engages with the London
Collective Investment Vehicle (LCIV). LCIV is exploring low carbon
funds but they are not yet in place; when they are, the Pension
Committee will be asked to consider moving investments into them as
part of the agreed investment strategy.
As all London Boroughs are signed up to invest with LCIV, there is
significant influence from across London to move into low carbon
funds as part of future investment strategies to meet pension
liabilities.
3. Pass a motion or make a public statement supporting the
principle of divestment from fossil fuel companies, promising to
move toward a fossil fuel free portfolio and advocating that the
London Pension Fund and Local Government Pension Scheme members to
do the same;
Though the meeting did not pass a motion supporting the principle
of divestment from fossil fuel companies, Members of the Pension
Committee (with support from the Pensions Board) is committed to
reducing share-holdings in carbon based investments. The Committee
has been working with external investment advisors to formulate a
revised investment strategy.
Members of the Pension Committee and Pension Board are fully aware
of the risk of fossil fuel investments becoming "stranded assets"
(assets in oil and gas companies that might become worthless due to
climate change legislation), and they have invited speakers to
recent meetings to have in-depth discussions on fossil fuel
investment.
4. To show commitment to doing the above in a timely manner by
setting up a working group to report back on a strategy to move
toward the goal of divestment within three months of submission of
this petition.
The Pension Committee's commitment to environmental and sustainable
investment is detailed in section 9 of the Investment Strategy
Statement (ISS). The latest draft of the ISS was tabled at the
Cornmittee meeting on 24 July 2018. Section 9 had been updated to
include consideration of carbon risk factors as part of the
investment strategy.
Key excerpts of section 9 of the ISS are:
9.6 The Fund will invest on the basis of financial risk and return
having considered a full range of factors contributing to the
financial risk including social, environment and governance factors
where these present financial risks to the delivery of portfolio
objectives and therefore impact on the sustainability of the Fund's
returns.
9.7 Where appropriate, the Committee considers how it wishes to
ap