South London’s Wandsworth council announced today it is pledging up to £80 million of its £2.6 billion pension pot to two renewable energy investment funds.
The now Labour-controlled borough is committing a slice of its workers’ cash to what it calls “energy transition funds”, as part of a planned retreat from carbon-heavy assets.
Benefitting are the fast-expanding, privately held Octopus Energy Transition Fund, and Sandbrook Climate Infrastructure Fund. Either fund will receive up to £50 million, under a cap across both of £80 million.
Octopus’s asset managers target hydrogen development, local renewable generation, transmission grids, storage and supply chains. Sandbrook will focuses on the same, seeking also returns from energy efficiency projects.
In May’s local elections, the long-time Conservative flagship council flipped to a Labour majority of 22 seats, the first time since 1978 that Labour has ruled the riverside borough.
Almost all UK councils including Wandsworth have declared ‘climate emergencies’ compelling them to make all direct and indirect activities to be assessable as “Net Zero” on or before the government’s 2050 deadline. Wandsworth also targets 2030 as its deadline to have cut 60% of its emissions.
Carbon divestment campaigners across the capital’s 33 boroughs and throughout the UK have sought more specific, quicker action. Since 2017 London Borough Divestors have pressed for town hall pension funds to declare a date by which all pension resources will be pulled out of direct interests in hydrocarbon producers.
Obstacles to that goal have included carbon-rich assets lumped among non-carbon ones in opaquely managed funds, and government pressure dating from George Osborne’s chancellorship to amalgamate town hall pension assets at city- or regional-level, such as in Britain’s first, the Greater London Authority’s Collective Investment Vehicle.
In consequence, no more than four London boroughs – including Waltham Forest and Southwark, but excluding Wandsworth and laggards neighbouring Merton – are believed to have declared a public deadline to – in campaign parlance – “go fossil free”.
Paul Guilliotti, Wandsworth’s assistant finance director, oversees a multi-billion pension fund jointly managed since 2016 for staff shared between Wandsworth and neighbouring borough Richmond on Thames. Most contribute at least 7% of their earnings into the scheme.
Chair of the boroughs’ joint pensions committee Cllr Norman Marshall said: “Investing in renewable energy is not just good for the environment. It delivers a good return for the fund and will also help deliver energy self-sufficiency and security which is crucially important given the reprehensible actions of Russia in Ukraine.”
