Oxford City Council welcomes the approval of the first Climate Change Policy of the Oxfordshire Local Government Pension Fund.
The pension fund updates were approved earlier this month at a virtual meeting, having received input from Oxford City Council and the campaign group Fossil Free Oxfordshire.
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.
- 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.
- Agree the target to reduce greenhouse gas emissions from investments by 7.6% every year in line with the Paris Agreement and a maximum 1.5°C increase in global temperatures. The world needs more business plans to be in line with or improve on the 2015 Paris Accord agreement over emission paths. The Paris Agreement is the only agreement that has significant policy change signed by a large majority of countries, and it commits to the goal of limiting global heating to less than 2oC with a stretch goal of 1.5°C.
The Committee recognised that the Oxfordshire Fund has travelled a huge distance over the last year in response to the risks of climate breakdown and is becoming one of the leading Local Government Pension Funds for their response to the risks of climate breakdown. The convening of a workshop by the pension fund, instigated by City Councillor Mark Lygo in late 2019, was a helpful springboard to the further development of this policy.
The Pension Fund has membership made up of staff and former staff members from Oxfordshire County Council, the county’s five district councils, including Oxford City Council, and other local organisations.
In July 2014 the City Council became the first UK local authority to introduce a fossil fuel divestment policy and, in October 2018, passed a cross-party motion calling for the Oxfordshire Pension Fund to recognise that taking money out of fossil fuels is the right thing to do.
In a response to the recent consultation for the Oxfordshire Pension Fund’s first formal Climate Change policy, a principal challenge that was identified by the City Councillor Tom Hayes in the City Council’s response, alongside other respondents, remains outstanding.
The Pension Fund should ensure that 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. Whatever metrics are used to identify climate risk exposure, these investments should be screened against metrics so that investments are not contributing to global heating above the 1.5oC scenario.
"Following the declaration of two motions calling for divestment by the Pension Fund, the City Council welcomes the commitment to take money out of fossil fuels. The City Council is proud to have worked closely with civil society campaigners including Fossil Free Oxfordshire and looks forward to continuing work with the Pension Fund to overcome remaining challenges.
“However ambitious a pension fund pool member may be, the pace toward divestment and zero carbon investments will be limited by the fund offerings provided by Brunel, the company owned by Oxfordshire and additional Local Government Pension Funds to manage investments on their behalf. To go faster requires Brunel to be encouraged by its constituent pension funds and the City Council would welcome Oxfordshire Pension Fund, and additional pool members who are serious about tackling climate breakdown to urgently exert their influence in this direction.”
Councillor Tom Hayes, Deputy Leader and Cabinet Member for Green Transport and Zero Carbon Oxford
"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."
Al Chisholm from Fossil Free Oxfordshire