Be informed. Be challenged. Be inspired.

London, New York mayors urge cities to divest from fossil fuels

London, UK
Thomson Reuters Foundation

The mayors of New York City and London have urged other cities to divest their pension funds from fossil fuel producers, as they introduced a toolkit to help cities shift investments away from companies that drive climate change.

New York City said in January, 2018, that over five years it would remove fossil fuel investments from its public pension funds, which then had $US189 billion in assets under management.

London Mayor Sadiq Khan pledged to do so in his 2016 election campaign.

Investors with $US11 trillion in assets under management have pledged to divest from fossil fuels, campaign group said in a September report.

“We need all cities to act now to help protect our planet for future generations,” Khan said in a statement, 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,” the mayor said, noting that “taking action on divestment is not only achievable but absolutely necessary”.

Archbishop Desmond Tutu, of South Africa, and former US Vice President Al Gore also reiterated their support for divestment at a meeting in Cape Town on Tuesday.

“Any organisation 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 reduced the share of fossil fuel holdings in its pension funds from one per cent in May, 2016, to 0.2 per cent by September, 2019, according to a spokeswoman for the mayor’s office.

The funds are controlled independently of the mayor by the London Pension Fund Authority, which had £6.5 billion in assets under management at the end of September, 2019, according to the spokeswoman.

New York’s divestments are “still in progress”, said Friederike Hanisch, who manages the C40 Divest/Invest Forum of 14 cities that have pledged to divest from fossil fuels.

She said divestment efforts were expected to improve rather than hurt returns for investors.

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.”

So far, a growing fossil fuel divestment push has not substantially impacted fossil fuel company share prices or reduced carbon emissions, economists Robert Pollin and Tyler Hansen of the University of Massachusetts at Amherst, said in a 2018 paper.

But 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 $US36 billion that year, the report found.

Some coal, oil and gas companies have said they see the divestment campaign as a “material risk” that could make it harder to source investment.

Paul Fisher, a fellow at the Cambridge Institute for Sustainability Leadership at Cambridge University, said the city divestment push was “part of a general trend” toward shifting money from fossil fuels and that trend “is making fossil fuel companies sit up and take notice”.



sight plus logo

Sight+ is a new benefits program we’ve launched to reward people who have supported us with annual donations of $26 or more. To find out more about Sight+ and how you can support the work of Sight, head to our Sight+ page.



We’re interested to find out more about you, our readers, as we improve and expand our coverage and so we’re asking all of our readers to take this survey (it’ll only take a couple of minutes).

To take part in the survey, simply follow this link…

Leave a Reply

Your email address will not be published. Required fields are marked *

For security, use of Google's reCAPTCHA service is required which is subject to the Google Privacy Policy and Terms of Use.