Hackney Council's pension fund committee has agreed to endorse a series of recommendations on dealing with fossil fuel and climate change issues after facing mounting pressure from a campaign group.
At a special meeting on divestment on 28 January the committee agreed to add a dedicated fossil fuel investment section to the fund's investment strategy statement, which will outline a formal commitment to take climate change and fossil fuel issues into account.
It endorsed investing 5% of the fund in sustainable/low carbon and clean energy funds, and review options to switch some of the existing property mandate into a low carbon property fund.
The fund will also continue to engage with investee companies regarding climate change issues and look for further opportunities to work with others on this. The committee agreed to continue engaging with the Local Authority Pension Fund Forum and how it can press ethical, social and governance issues directly with large corporate organisations to influence their decisions.
The recommendations have yet to be developed into concrete plans in a full announcement this September, however.
The agreement of these measures comes on the back of pressure from campaign group Divest Hackney for the council to freeze any new investments in fossil fuels made by its pension fund. It also urged the fund to divest from direct ownership and any commingled funds that include fossil fuel public equities and corporate bonds within 5 years. Other funds in the local government pension scheme have also come under pressure from similar campaign groups over fossil fuel investments.
Hackney's pension committee chair, councillor Robert Chapman, said the fund's future strategy to managing investments in relation to climate change risks would be based on the approach taken by the Environment Agency Pension Fund, which last year unveiled a ground-breaking strategy.
He said while he understood public concerns regarding climate change and fossil fuel investment, the committee has legal responsibilities to ensure the fund receives the best returns possible in order to meet its liabilities.
He said in a statement: "I'm pleased that we've been able to officially confirm our ongoing commitment to considering environmental, social and governance issues when making decisions about investments as part of the pension fund portfolio.
"The committee was very impressed with the approach taken by the Environment Agency Pension Fund and we will look at basing our future strategy on their approach to managing investments in relation to the risks of climate change.
"We understand the concerns around local authority pensions funds' investment in companies related to fossil fuel. Hackney has always promoted greener living but it's not as simple as just removing our investment. We have legal duties to those whose pensions we manage, as well as local tax payers.
"The recommendations are not going to change things overnight but this is a positive step that addresses both environmental issues, our legal obligations and will help us to make a real difference in the longer term."
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