Hackney set to debate cutting £42m investment in fossil fuels – but activists say it’s too little, too late

Divest Hackney says the council still has not done enough. Picture: Divest Hackney (Image: Archant)

After more than a year of pressure from environmental activists, the pensions committee will tonight propose cutting future CO2 emissions produced as a result of its £1.2bn pension fund by 50 per cent within six years. CO2 emissions were estimated to be 7.11 tonnes last July when the council commissioned sustainability data company Trucost to carry out a carbon analysis on the fund.

But rather than removing money from the most polluting oil, gas and coal companies, the proposal is to recommend pension fund managers meet a new carbon target – without compromising their legal obligation to maximise on their investments.

The council’s finance chief Ian Williams told the Gazette this afternoon he believes the plans are “ambitious” considering the restrictive legal framework.

Pension fund managers must comply with the government’s asset building agenda, and must not make decisions for political reasons.

The move has been made possible because of a review looking at financial risks posed to fossil fuel investments in light of the Paris Agreement global action plan to limit global warming.

Mr Williams said: “It’s not just bureaucratic talk – this is the stark reality we are participating in, which unfortunately activists don’t want to engage in.”

But Gabriel Davalos from Divest Hackney said the council’s “ambition had failed to keep pace”.

“Hackney Council isn’t moving fast enough or far enough,” he said. “The strategy would have been appropriate a few years ago, but the financial and physical risks posed by climate change have only increased.

“We were hoping the council would step up and be a leader, protecting the pensions of Hackney as well as its residents from the risks posed by climate change. Unfortunately it looks like they are settling for much, much less. But there’s still hope.”

A final decision will be made on March 29.

Chair of the pensions committee Cllr Rob Chapman told the Gazette the move is a step towards a fossil-free pension fund.

“Carbon emissions are the biggest risk humankind has had to deal with,” he said.

“Over time we will end up with less investment in fossil fuel companies than now.”

Project accountant Rachel Cowburn explained that she had “deliberately not put a monetary amount on the target”, because that wouldn’t distinguish between the “different degrees of dirtiness” of the oil, gas and coal investments.

“What we haven’t done is to name individual companies that pose the greatest risk,” she said.

“We don’t think it’s acceptable to say to fund managers you can’t invest in these companies.”

Cllr Chapman explained: “You can’t just say to a manager ‘Sell all your things’ because that means we are undermining their management doesn’t it. Then if they don’t meet their targets they will say ‘You told us to sell that’. “They need to come up with strategies that better meet our requirements, and over time we will move our investments towards funds and managers that will meet our requirements.

“What we want to move to is a situation we are looking at saying: ‘This is our target, this is what we need to achieve.’ As well as the financial target we have this carbon target as well.”

In March 2015, Freedom of Information figures revealed the council was investing £42,438,296 in 22 different oil, coal and gas companies, including £2,246,655 in Exxon Mobil.

The multinational was linked to the 1989 Exxon Valdez environmental disaster, which saw 38 million gallons of crude oil spill into the remote Alaskan sea.

The coastal ecosystem there is now permanently damaged, and 28 years on some wildlife populations and habitats are listed as “not recovering”.

At the time Charlotte George from the Hackney Green party said the investment amounted to “short term thinking”.

“It’s a key issue when Hackney residents’ money is being used to prop up fossil fuel – we can’t possibly burn all the fossil fuels without screwing ourselves up,” she said.