The mayors of New York City and London on Tuesday urged other cities to divest their pension funds from fossil fuel producers as they introduced a tool kit to help cities shift investments away from companies that drive climate change.
New York City in January 2018 said that over five years it would remove fossil fuel investments from its public pension funds, which then had US$189 billion in assets under management.
London Mayor Sadiq Khan pledged to do so in his 2016 election campaign.
Photo: AFP
Investors with US$11 trillion in assets under management have pledged to divest from fossil fuels, campaign group 350.org said in a report in September last year.
“We need all cities to act now to help protect our planet for future generations,” Khan said in a statement on Tuesday, which accompanied an advice guide for other cities on how to alter their pension investments.
It contained case studies of disinvestment efforts in Melbourne, Berlin and Stockholm, as well as New York and London.
“I’m calling on every major city in the world to follow suit,” Khan said, adding that “taking action on divestment is not only achievable, but absolutely necessary.”
South Africa’s Archbishop Desmond Tutu and former US vice president Al Gore also reiterated their support for divestment at a meeting in Cape Town on Tuesday.
“Any organization committed to operating responsibly in this new decade has a moral imperative to stop participating in financing the destruction of human civilization’s future,” they said in a statement.
London had by March last year reduced the share of fossil fuel holdings in its pension funds to 0.4 percent, said C40 Cities, a coalition of cities committed to taking action on climate change.
It did not specify if this included funds directly controlled by the mayor or the London Pensions Fund Authority, which is independently run and had just more than £6 billion (US$7.9 billion) in assets under management at the end of that month, according to its accounts.
The London mayor’s office was not available to comment.
New York City’s divestments are “still in progress,” said Friederike Hanisch, who runs the C40 Divest/Invest Forum of 14 cities that have pledged to divest from fossil fuels.
Divestment efforts were expected to improve rather than hurt returns for investors, she said.
None of the C40 cities that have divested their pension funds has seen worse performance and some have done better by removing fossil fuels, C40 said.
“We don’t expect it to have a negative effect at all on the income of pension funds,” Hanisch said. “If anything, we expect it to have a positive impact.”
A growing fossil-fuel divestment push has not substantially affected fossil-fuel company share prices or reduced carbon emissions, University of Massachusetts Amherst economists Robert Pollin and Tyler Hansen said in a 2018 paper.
However, the push is effectively raising awareness of growing climate risks, they said.
Assets in funds that have committed to divest from fossil fuels were worth US$36 billion that year, the report said.
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