Council's pension fund: carbon neutral pledge
Hackney Council's pension fund has pledged to achieve carbon neutrality by 2040, with interim targets set in the meantime, as part of its new greener ambitions.
The fund has already reduced its investments in fossil fuel reserves by nearly 97% as part of its commitment, made six years ago, to move away from investments in carbon-related firms.
The near-100% decarbonisation of investments is a significant outperformance of its commitments to reduce exposure by 50% between 2016 and 2021 - the first council in the country to make such a commitment.
One of the ways the fund has done this is by moving away from carbon-intense stocks - heavily reliant on oil, gas and mining investments - and instead investing more in greener, global funds.
The fund has also expanded its responsible investment strategy which aims to see it carbon neutral within 20 years, and to align with global ambitions to limit worldwide warming.
To achieve its goal, the fund will work with its investment managers and investee companies to demonstrate plans or commitments to decarbonise. It will also look to place new investments into companies and businesses that have a greener agenda and can drive the move to net zero.
The new strategy aims to harness the power of collaborative investment policy to drive change in how companies operate, incentivising them to be greener.
Three key principles will be applied to companies when considering future investments: climate action; clean energy systems; and human rights.
We’re committed to some of the most robust and ambitious action of any Council in the country to tackle the climate emergency.
We are very proud to have met and exceeded our target - but our work doesn’t end here. Our ambition is to achieve net zero emissions by 2040, bringing our fund in line with the international 1.5c target to limit global warming.
We have already reviewed our responsible investment policies, setting out our principles for existing and future investments and are now working on setting interim targets to monitor our progress towards a fossil fuel-free future. We will do this while protecting the pensions of Council employees, including key workers like social care workers, waste operatives and parks staff.
Good investment returns since setting the target have led to a strong funding position at the three-yearly valuation that has enabled the Council to propose reducing employer contributions.