Further divestment of Hackney pension fund
Hackney Council’s Pensions Committee is taking another big step towards a fossil free pension fund after approving ambitious plans to cut the fund’s exposure to future CO2 emissions.
This move follows a review which looked at the financial risks posed to the pension fund’s fossil fuel investments in light of the Paris Agreement, a global action plan to help limit global warming.
The Fund will be making a number of changes to its equity portfolio of stocks. Such as investing 10% of its assets, which is around £145m, into a newly created type of fund, the MSCI Low Carbon Target Fund. This reduces the funds exposure to fossil fuels and carbon emmissions while still offering acces to a wide range of global markets.
On top of this a further £180m will be invested in the socially responsible investment, the RBC GAM’s Global Sustainable Equity strategy via the London CIV, a collective invesment for Local Authority pension funds. This strategy aims to invest in companies with long term, sustainable revenues, with a strong focus on Environmental, Social and Governance (ESG) factors.
These two changes are accompanied by a significant reduction in exposure to the FTSE Allshare Index, which represents the Funds most significant exposure to fossil fuel companies, further assisting the Fund in reaching its carbon reduction target.
Climate change is probably the greatest threat facing humankind that’s why last year, the Hackney Pension Fund committed to reduce its exposure to fossil fuel reserves by 50%, reducing the Fund’s exposure to carbon risk and aligning it with the 2 degrees scenario set out in the Paris Agreement. These new changes to our equity portfolio represent a significant step towards achieving this target and reflect our long term ambition to move away from fossilfuel investments.”