Key changes to pension investments reflect the realities of climate change

Workers at a whole series of organisations in Oxfordshire can be confident that their pensions are increasingly being invested in a climate change friendly way following decisions taken by a key group recently.

The Oxfordshire Local Government Pension Fund approved its first Climate Change Policy at a recent virtual meeting having received input from the campaign group Fossil Free Oxfordshire.

The Pension Fund has membership made up of staff and former staff members from Oxfordshire County Council, the county’s five district councils and many other local organisations.

Experts from across the investment and academic sectors joined Fossil Free Oxfordshire in working with the members of the committee to develop the new direction. The Pension Fund Committee is largely made up of councillors from Oxfordshire’s six councils.

Two key changes were agreed, building on a decision that the committee had made in March to switch five per cent of its assets into a low carbon fund. These were:

  • To switch another six per cent of assets into a new Sustainable Equities Fund being developed by Brunel, the company owned by 10 Local Government Pension Funds to manage investments on their behalf.
  • The a target to reduce carbon emissions within the portfolio by 7.6% per year in line with the UN Environmental Programmes findings of the global requirements to contain temperature rises to 1.5°C.

The Committee also heard that all but one of the responses to a consultation on the issues had welcomed the direction of travel and the commitment to invest in line with the Paris Agreement and a maximum 1.5°C increase in global temperatures.

Chairman of the Committee, Oxfordshire County Councillor Kevin Bulmer, said: “We are grateful for all the input and advice we’ve had from campaigners and experts. Everybody recognises that there is still much work still to be done, and many challenges still to be faced.

“It’s important to me that Oxfordshire makes a real contribution to the climate debate and takes strong effective action, not just more hot air. I believe the action taken here achieves that and I look forward to building on the hard work to date”.

The Committee noted that their approach and outcomes had resulted in the Oxfordshire Fund becoming one of the leading Local Government Pension Funds in terms of their response to the risks of climate change, but were keen to progress further and asked officers to bring regular reports to their meetings to enable them to monitor the impact of their new policy.

At the meeting Al Chisholm from Fossil Free Oxfordshire addressed the Committee before the debate on Friday and congratulated them on the huge distance the Fund had travelled over the last year in response to the risks of climate change.

She said: "Fossil Free Oxfordshire welcomes the Pension Fund's commitment to reducing greenhouse gasses from its investments by 7.6% every year in line with a 1.5 degree C warming limit. We look forward to working with the councillors and officers to ensure these pledges are underpinned by the metrics, monitoring and exclusion of the most polluting corporations needed to give scheme members and the public confidence these emissions reductions will be met."