Waltham Forest first UK council to fully divest its directly managed funds

Following its 2016 announcement that it would seek to divest its pension fund from fossil fuels, Waltham Forest Council’s Pension Committee completed the task of divesting the funds it directly manages in 2021.

Waltham Forest has now become the first authority to complete its work divesting directly managed funds away from fossil fuels. Other councils including Luton, West Berkshire, and Oxfordshire are currently working to divest their funds.

Cllr Clyde Loakes, Deputy Leader and Cabinet Member for Air Quality and Climate, said: “Often when people talk about tackling the Climate Emergency, they are discussing the tangible actions that we can all see. Of course, improving our roads, planting more trees, and retrofitting homes are incredibly important – but so is the behind-the-scenes work that people may not see, such as this incredible achievement divesting our pension funds.

“Moving away from investments in oil, coal, and gas companies in favour of investing in those working on sustainable or renewable energy like solar or tidal helps these new technologies become better, more efficient, and more readily available. We have a responsibility to our children and grandchildren to give them the chance to enjoy the opportunities from which we have benefitted. One of the ways we can achieve this is through leading the shift away from fossil fuels towards renewable energy.

“We also want to help other local authorities and public sector bodies to do the same. We are happy to share our experiences and what we have learned with others – we are all on this journey together and I hope that sharing our success will encourage other councils to divest.”

It is estimated that UK pension funds have an estimated £128 billion invested in fossil fuel, according to research by Friends of the Earth in 2021 – equivalent to £1916 per UK citizen. Local government pension funds account for £10 billion of this.

The decision to divest helps protect the pension fund against overexposure to stranded assets, investments that once produced income but no longer do so – oil, gas, and coal stocks have fallen while over the same time period renewable energy technologies have become cheaper.

Divesting from fossil fuels helps to achieve the shift away from high-emission energy sources towards renewable ones such as solar, wind, and tidal. In the same year as European temperature records were once again smashed, the importance of this work has never been clearer.

Cllr Johar Khan, Pension Committee Chair, said: “The people who rely on our pension fund can be reassured that not only is it well managed, but it is also ethically managed. Divestment is not only a sensible decision that helps protect the pension fund from stranded assets, but it also underlines our determination to do all we can to tackle the challenges of the Climate Emergency.”

Some of the Council’s pension funds are invested in the London Collective Investment Vehicle (CIV). These funds are outside its direct control, and so the Council is using its influence to encourage wider divestment in the pooled funds.

The Pension Fund is not directly overseen by Cabinet governance, although the committee’s work supports the Council’s ambition to become net-zero by 2030. To try and achieve this, Waltham Forest has pioneered its road improvement programme to encourage residents to use sustainable transport where possible, as well as work to help reduce emissions from homes through an extensive retrofitting programme. In 2019 it became one of the first local authorities to declare a Climate Emergency. Find out more about how the Council is tackling the Climate Emergency and sign up for the regular newsletter.