London councils ramp up renewable energy investments

Wandsworth and Richmond council pension funds are increasing their focus on renewable energy investments as part of a more than £600 million switch being made by 11 London council pension funds.

London CIV is the pool with responsibility for the assets of pension funds for 32 London Local Authorities including the City of London.

But one of the largest individual investments is to come from the combined Wandsworth and Richmond pension fund. The fund has already invested £40 million into these assets, but aims to increase this commitment to £140 million over the next 12 months.

“We came to the conclusion in 2020 that maximising the performance of the fund and supporting the councils’ pledge to tackle global warming did not have to be mutually exclusive,” said Councillor Guy Senior, chair of the joint Wandsworth and Richmond Pension Fund.

The switch into greener investments has been a gradual process, but the fund’s equity portfolio already has a carbon footprint more than 30% lower than its benchmark.

“Investing in renewable energy is not just about being green, it will help deliver energy self-sufficiency and provide a good yield to pay our pensions so it is a win-win situation all around,” Senior added.

Mike O’Donnell, CEO of London CIV said: “London CIV has committed to achieving net zero greenhouse gas emissions by 2040 and becoming the first local authority pension pool to do so. By setting an ambitious target it sends a clear signal to all our clients, managers and investee companies about urgently addressing this increasingly material issue.”

“Our strategy ensures that the range of funds we offer is suitable for all our clients’ climate goals, such as those highlighted by Wandsworth,” he continued.