London assembly backs fossil fuel divestment

London assembly members have voted in support of fossil fuel divestment, calling for London mayor Boris Johnson to divest the £4.8 billion London Pension Fund Authority’s (LPFA) pot from fossil fuels over the next five years.

The London assembly voted on Wednesday, with a majority of 15-3 supporting taking the pension’s investments out of the coal, oil and gas industries. The motion was drawn up by Divest London and filed by Green Party assembly member Jenny Jones. It calls for the fund to be fossil free within five years. Over 250,000 individuals have their pension benefits invested in the LPFA.

Divest London has described the victory as a “key moment” in their campaign to get City Hall to cut out fossil fuels. However, Johnson will get the final say on the decision but the vote highlights how the divestment movement is growing and its support.

Divest London have said, “If Boris Johnson refuses to divest, he will be actively ignoring the wishes of the London Assembly, Londoners of all stripes – health workers, teachers, students, clergy members, lawyers and parents. He will also be ignoring the warnings of the Bank of England, the Church of England, the World Bank and the UN.”

The divestment movement, which began in the US but has since spread around the world, has been gathering pace in recent months, with universities, religious institutions and pension funds amongst those committing to stop funding polluting energy sources. Over the last three years institutions that have committed to divesting represent over $50 billion (£32bn) in assets.

While the divestment movement often focuses on the moral case for divestment, there is also a financial case.

A study recently argued that the vast majority of fossil fuel reserves must remain in the ground and unused if the world is to avoid dangerous levels of climate change. As a result, supporters of the divestment campaign state that many fossil fuels are overvalued when the need to tackle climate change is factored in, making fossil fuel investment risky.

In its latest research agenda the Bank of England acknowledged that climate change and stranded assets could have an impact on the financial markets.

Photo: Martin Nikolaj Bech via Flickr

Further reading:

University of Edinburgh academics call for divestment

Fossil fuel industry challenged as part of Global Divestment Day

Harvard faces court over fossil fuel divestment

Students call on parents to divest from fossil fuels

Fossil fuel divestment campaigns can help ‘stigmatise’ industry