When the Mayor of London, Sadiq Khan was elected in 2016, he committed to divest the pension funds from fossil fuels. And he called on the local boroughs to do the same and join him in the fight against climate change.
Sadiq Khan focusses on divestment. To “divest” means moving assets that are invested in companies that make their money from fossil fuels, therefore contributing directly to climate change.
Mayor Khan started a discussion with the London Pension Fund Authority (LPFA) which eventually led to the development of the LPFA’s climate change policy in summer 2017. According to this new policy, before a decision is made to invest in a company, managers are requested to engage with that company and assess whether they are preparing to thrive in a low-carbon economy. If a company doesn’t demonstrate sufficient measures to manage climate-related risks, the LPFA proceeds to divest from it.
An important role in building early support for divestment and also in the considerations of the LPFA was also played by local campaigners. The city engaged in an impactful dialogue with them that lead to mutually beneficial collaboration.
The mayor has ambitious plans for London to be a zero carbon city by 2050. Achieving this will require action across the board from cleaning up London’s transport network, to supplying the capital’s homes and workplaces with clean renewable energy. It also requires organisations of all kinds to rethink financial investments that support fossil fuel industries.