London’s largest public pension fund is facing renewed calls to divest from fossil fuel-related holdings as it emerged it held companies involved in the Dakota Access Pipeline.
The London Pension Fund Authority (LPFA) had holdings in three companies involved in the controversial US development, according to portfolio data from 30 September 2016 circulated by campaign group Divest London. The investments were bonds issued by Energy Transfer Partners, ConocoPhillips, and Marathon Petroleum, worth roughly £393,000 collectively.
A spokesperson for the £4.6bn (€5.4bn) pension scheme said the holdings were made through a pooled fund managed by BlackRock. The LPFA made the decision last year to exit the fund and is gradually redeeming its position. The decision was not linked to the pipeline-related holdings, the spokesperson added.
As of the end of December 2016 only the holdings in Energy Transfer Partners bonds were still in the portfolio.
The pipeline has faced major protests as campaigners have said its construction will affect a Native American reservation. However, US president Donald Trump, within days of taking power, signed an executive order that eases restrictions put in place by his predecessor Barack Obama.
IPE earlier this week reported that Nordic banking group Nordea had divested from Energy Transfer Partners, Sunoco Logistics, and Phillips 66 due in part to the companies’ refusal to engage with the financial group over their activities with the pipeline.
The LPFA had an investment worth roughly £39,000 in Phillips 66 at the end of September. This position is also held via the BlackRock fund and stands to be redeemed.
Suzanne Dhaliwal, co-director of the activist group UK Tar Sands Network, said: “It is essential that London show global leadership and divest now from the Dakota Access Pipeline to set an example that we cannot continue to fund projects that devastate indigenous rights and push us further into climate chaos.
“With Trump and [Canadian prime minister Justin] Trudeau hell bent on pushing forward with tar sands expansion and associated pipelines, our collective action lies in stopping capital flowing from London.”
In a statement, the LPFA said: “As a pension fund we have a fiduciary duty to make investments where we see the best return for our stakeholders. Our key aim must be to ensure we can continue to pay pensions as they fall due. However, it is also our objective to use our influence as a large institutional investor to encourage responsible long-term behaviour in the companies in which we invest. We feel that engaging with companies on these issues is more productive than divesting.”
Sadiq Khan, the mayor of London, pledged to force through divestment policies during his campaign for the mayor role last year. The previous London mayor, Boris Johnson, rejected similar calls in 2015, despite pressure from local lawmakers.
The LPFA is now part of the Local Pensions Partnership with the Lancashire County Pension Fund, in line with the UK government’s policy of pooling the assets of public sector pension schemes.