City Hall moves to end deal with fossil fuel firms - but still invests £70m in companies that drive up carbon emissions

It comes as new data suggests London councils together invested a total of almost £2billion in the industry
Divestment: Sadiq Khan, the Mayor of London, has stepped up efforts to cut ties with fossil fuel firms - but it still invests almost £70m
Kevin Frayer/Getty Images

City Hall has stepped up efforts to end its controversial deal with fossil fuel firms, but it still invests almost £70million in companies that drive up carbon emissions.

Sadiq Khan last year pledged to strip back his authority’s investment in the fossil fuel industry, which new data suggests until earlier this spring amounted to more than £200m.

Amid fierce pressure from campaign groups, a spokesman for the London mayor said a significant amount of cash invested in the industry has now been pulled.

According to the mayor’s office, the figure now stands at £69m.

But campaigners said City Hall’s approach to this process – known as divestment – has been “inconsistent” compared to other cities across the globe.

Pollution seen hanging over the city of London. Campaigners say controversial investments in fossil fuel industry pose a threat to climate (Evening Standard / eyevine)
Jeremy Selwyn

"London should be making a proud public statement about its intentions to cut ties with the industry driving climate change,” said Ellen Gibson, of the UK Divestment campaign.

“While other world cities have committed to meaningful divestment, City Hall has chosen an inconsistent approach, which lets big polluters off the hook. London should be a climate leader - but on this, we've fallen behind.”

City Hall invests in the industry through the London Pensions Fund Authority (LPFA). Mr Khan and the LPFA have agreed on a policy to - where possible - pull its funds from fossil fuel companies.

London Pollution - In pictures

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On the campaigners’ claims, a spokesman for the mayor said: “Sadiq believes that the new LPFA climate change policy is one of the strongest and most sophisticated of any city in the world and will help to fulfil his manifesto commitment to take all possible steps to divest the fund of its remaining investments in fossil fuel industries.

“He particularly welcomes the LPFA’s commitment to implement all necessary divestment by 2020 and is pleased that the fund has already successfully divested many of its assets.

“Research carried out by City Hall has also revealed that the scale of divestment is on a far bigger scale than other cities and is of a more complex nature.”

According to data compiled from a series of Freedom of Information requests by divestment groups, until March this year, London local authorities together invested a total of almost £2billion in fossil fuels.

Campaigners say the investments pose a huge threat to climate, and contradict Paris Agreement pledges made by the UK government.

Martin Watters, of Divest London, said: “The fact that London funds continue to invest in the companies responsible for the crisis flies in the face of this agreement, and of all the city’s efforts being made to reduce emissions and combat climate change.”

Sadiq Khan: The London mayor has moved to cut City Hall's ties with fossil fuel firms
PA

Almost all councils in London, like City Hall, invest in the industry through pension funds of which they manage. The returns on these investments are then paid out as pensions.

While the majority of local authorities in the capital continue to invest in the industry, several have made commitments to lower their fossil fuel exposure.

Waltham Forest and Southwark councils became the first in the UK to commit to a divestment of funds. Hackney and Haringey have made partial commitments.

Simon Miller, former chair of Waltham Forest council’s pension fund committee, said: “Given current pressures on Local Authority budgets, our pension funds have a key role to play, not only in making our economy greener and our communities healthier, but as driver of sustainable, future focused investment in local areas.”

While two local authorities have made firm commitments to divest, other London councils continue to invest significantly in the industry.

Hammersmith and Fulham, until at least March this year, invested 9 per cent of its pension fund into fossil fuel companies - the highest of all of the capital’s boroughs, according to the campaign group’s figures.

A spokesman for the council said it had in March committed to end investments in fossil fuel companies, but did not provide a date for when this is likely to happen.

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