Report by James Cracknell and Richard Collett-White
Waltham Forest Council still has tens of millions of pounds invested in fossil fuel companies – including BP and Shell – two-and-a-half years after pledging to divest its pension fund.
In September 2016 the council became the first local authority in the UK to agree to divest its pension fund from fossil fuels, but research by environmental investigations website DeSmog suggests it remains a long way from meeting its goal to fully divest by mid-2021.
At the end of the 2017/18 financial year the fund had an estimated £63million invested in fossil fuels, virtually unchanged from the year before, although the council claims it has been able to halve this figure over the last 12 months.
An email from an officer involved with managing the authority’s pensions also indicates that council bosses believe making the fund completely carbon free by 2021 will be difficult. In the email sent last December, seen by Waltham Forest Echo, a council officer wrote: “The easy option of choosing a passive carbon free or such index to invest in is not an option for us at this time, along with the fact that we hold pooled funds and cannot choose to simply divest from any particular stock.”
The news comes just over one week after councillors voted to declare a ‘climate emergency’ in the borough, acknowledging that “urgent action is required to restrict global warming to a maximum of 1.5°C”.
Environmental activists from Divest Waltham Forest, whose campaign originally led to the council making its divestment pledge, are now calling for the authority to act much faster in its efforts to slash carbon emissions. Campaigner Nat Harding said: “We acknowledge we are still in the third year of the council’s commitment to divest fully from all fossil fuels within five years.
“However, we are concerned by the slow rate of progress towards the complete divestment that was pledged to much fanfare, pride and admiration across the borough and indeed the country.
“At a time when faith in our leaders and politicians is wafer thin, it would severely damage our trust if this inspirational example of true leadership became another broken promise, exposing the fund to stranded assets and ignoring the climate emergency.”
Last year the council moved around one third of its £873m pension pot to the London Collective Investment Vehicle (CIV), a pooled investment for borough councils that seeks to “limit exposure” to fossil fuel firms. Waltham Forest says it now has only £3.2m invested in such companies via the CIV.
While the council claims its total fossil fuel investments are currently around £30m, or 3.4% of the pension fund’s value, its estimates for previous years only included ‘oil and gas’ investments, excluding coal and wider fossil fuel infrastructure such as controversial new pipelines in the US. The council does not publicly release data on its exact investments, meaning Waltham Forest Echo and DeSmog were unable to verify these figures.
A council spokesperson said: “In 2016 the pension fund committee decided to divest from fossil fuels over the following five years. The committee is in the process of developing an approach to achieve this aim. Ultimately we are reliant on the London CIV having appropriate options available to deliver our investment objectives.
“During 2018 the committee invested in three funds provided by the London CIV. These were selected taking into consideration the social, economic and environmental approach of the managers, which the committee believes will contribute to achieving our fossil fuel objectives. The effectiveness of this approach will now be monitored.”
In their ‘climate emergency’ declaration, councillors cited the council’s divestment pledge as proof it had been “at the forefront of often innovative initiatives to raise awareness, improve our environment and reduce the impact on our planet”. Celebrating the declaration, cabinet member for the environment Clyde Loakes said: “We know how much our residents care about the environment and I’m proud to see so many stand up for their beliefs. We owe it to future generations to change the way we live today, before it is too late.”