South Yorkshire Pension Fund is set to divest from companies promoting ‘pure’ coal and tar sands in a bid to tilt towards a low carbon economy within its portfolios.

The decision has been made ahead of climate talks in Paris after the investment board concluded it wanted to monitor carbon risk on its some £317m fossil fuel investments, which is roughly 5.7 per cent of total investments.

The investment board said it had formally confirmed it wanted to divest from ‘pure’ coal and tar sands companies, noting that coal is the ‘most polluting’ fossil fuel.

However, the board also emphasised policies of ‘active engagement’ with fossil fuel companies, rejecting any suggestions to divest further.

Sheffield Climate Alliance spokesman Sean Ashton said it remains “disappointed” that the board are still pursuing its policy of engagement, rather than looking more actively at divestment.

The decision follows a separate spate of divestment commitments in the UK in the run up to the COP21 climate simmit in Paris.

350.org spokesperson Ellen Gibson was more positive about the change: “This is a step in the right direction for South Yorkshire. In the lead up to the Paris talks, it’s more important than ever that our public institutions take a stand and show their commitment to a low carbon future.”

“Coal and tar sands are some of the dirtiest fuels, however, to prevent dangerous climate change we ultimately must keep 80 per cent of all fossil fuels in the ground. Pension funds should follow the lead of the Environment Agency and South Yorkshire by divesting from coal and tar sands, and dirty energy altogether,” she added.

There are currently around 50 divestment campaigns across the UK targeting local government pension funds calling on them to pull investments from all fossil fuel companies.

In September, it was revealed that a total of £14bn is invested in the fossil fuel industry by the UK’s public pension funds. Campaigners argue that these investments present a serious ethical and financial risk for councils.

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