UK - UK pension funds still lag when it comes to integrating environmental factors in their investments, according to a leading UK pension fund.

Philip Jones, investment manager at the London Pensions Fund Authority (LAPF), criticised the lack of action by consultancies on environmentally friendly investment.

Speaking at the launch of a £70m (€80.3m) waste and recycling fund on behalf of the London Green Fund, he said: "Consultants have a lot to answer for in this area. A lot of pension funds will not get out of bed until a consultant tells them to do so.

"And it is only in the last few years that consultants got up to speed on environmental matters."

He said further that green matters werre often seen as separate from the economy.

"People refer to environmental things as something different from the real economy," he said. "Pension funds do not embrace it as they see it as something different. However it has got to be one and the same."

The reason so many other pensions funds have failed to get the message is largely down to two things, according to Jones.

The first is the narrow experience mix of investment committees and boards.

The second is their overdependence on the use of consultants and the key fact that, until very recently, most consultants did not have a view and were then unable to advise.

Sustainable asset manager Foresight Group will manage the new entity, the Foresight Environmental Fund.

It includes a £35m investment from the London Green Fund, which Foresight has doubled thanks to commitments for a further £35m from local government funds and a range of other investors.

The London Green Fund combines European public and private finance to invest in environmental infrastructure. It is part of the Joint European Support for Sustainable Investment in City Areas (JESSICA) Initiative that was developed by the European Commission and European Investment Bank (EIB).

London Mayor Boris Johnson, who launched the fund at the first day of climate week and who aims to reduce London's carbon emissions by 60% by 2025 compared to 1990 levels, said he was determined to harness the wealth of investment opportunities arising as there was a shift away from fussil fuels.

In related news, the UK Sustainable Investment and Finance Association (UKSIF) has called for a clear government commitment in the upcoming budget that the planned UK Green Investment Bank will be granted the power to issue bonds.

UKSIF additionally argued that large-scale bond issuance should occur within three years of the bank's launch.

Penny Shepherd, UKSIF chief executive, commented on speculation that the institution may face delays in being allowed to borrow from the financial market.

"There is a real risk that our international competitiveness in this growing market will be seriously damaged if we are not seen to recognise the urgency of financing our own low carbon transition.

She called for "clear and rapid timetable" to allow the UK economy to benefit from green growth.

In February, UKSIF supported a letter to the UK's prime minister from chief executives and other senior figures from seven major UK investment institutions, welcoming the creation of a UK Green Investment Bank.

The executives highlighted the significant investment needed in low carbon infrastructure in the UK and expressed interest in considering future investments in the Bank's securities.