LGPS divestment from fossil fuels ‘too slow’, Unison says

The rate at which Local Government Pension Schemes are divesting from fossil fuels is “still far too slow”, trade union Unison has said.

In a new report by Unison that looks at, Responsible Investment in LGPS, the union has claimed that with the exception of a small number of leaders in the field, such as the Environment Agency Pension Fund and Avon Pension Fund, most of the LGPS funds are still developing approaches to how to integrate issues such as climate change or workers’ rights in their public investment policies.

It also found that some funds have done nothing to produce policy on environmental, social and governance policies.

Furthermore, it found that climate change has only been recognised as a material risk by 29 (32 per cent) of funds. Ten of these funds referenced reducing exposure to fossil fuel investments in response to the risk associated with climate change; 19 funds specifically outlined approaches to investing in low carbon alternatives. However, only three funds had progressed disclosure across the key ESG issues; 10 funds had disclosed policy in one area of ESG

Unison is urging its members in England and Wales to campaign through their local branches for their LGPS scheme to pull out of all investments in fossil fuels.

According to Unison national pensions officer, Colin Meech, the 88 LGPS investment funds hold over £280bn worth of assets.

“How this money is invested and how such issues as climate change are addressed will have an impact on the ability of the system to support pension payments in the future,” he said.

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