In November, Luton Council’s full council meeting unanimously passed a resolution calling on the Bedfordshire Pension Fund to divest from fossil fuels.
Full council requested that its representative(s) on the Pension Fund Committee similarly call for the development and adoption of responsible investment policies.
Luton Council has no direct investments in fossil fuel companies, namely coal, oil and gas. Through the Bedfordshire Pension Fund, however, Luton Council currently has around £40m invested in fossil fuels via the Local Government Pension Scheme.
Full council recognised that, as part of Luton Council’s commitment to a carbon neutral town by 2040, fossil fuel investments should be considered as part of the council’s ‘carbon footprint’. Councillors noted how ensuring pension funds make ethical investments is an often overlooked yet crucial step that can be taken to support Luton’s community and the planet.
The resolution recommended that the Bedfordshire Pension Fund adopt an immediate freeze on any new investment in the top 200 publicly traded fossil fuel companies. Councillors also called on the Bedfordshire Pension Fund to actively seek investment in companies that will reduce greenhouse gas emissions and undertake an assessment of its investment portfolio, with a view to disinvest in companies that sell coal, oil and gas.
Additionally, Luton Council will review its Council Treasury Management Strategy to ensure that it rules out future direct investments in oil, coal and gas companies. The revised strategy will be brought to Budget Full Council.
Councillor Aslam Khan, Deputy Leader of Luton Council, said:
“Calling on our pension funds to invest ethically is an example of tangible action that can be taken by Luton Council to ensure we meet our commitment of carbon neutrality in the town by 2040.
“Pension funds have a legal duty to treat members fairly. That means considering the longer-term interests of its younger members, who will disproportionately suffer the most from the impact of climate change if we do not take sufficient action.
“Fossil fuels are increasingly being out-performed by renewables, posing long-term material and financial risks to portfolios that have invested in coal, oil and gas. Funds have fiduciary duties to consider the benefits of decarbonising as part of their investment strategies; a duty to ensure that pensions can be paid and that this is undertaken at the best possible value. I am pleased that this resolution received cross-party political support.”
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