London mayor slams 'window-dressing' fossil fuel divestment
The Mayor of London, Boris Johnson, has resisted a call to renounce divesting by the London Pensions Fund Authority from fossil fuel investments, saying it is not within his powers to do so.
However, he criticised fossil fuel divestment generally as a “political gesture” and “window-dressing”.
Assembly member Gareth Bacon, the Conservative economics spokesman for the Greater London Authority (GLA), had asked Johnson at the regular Mayor’s Question Time meeting whether he would “renounce the calls from some in the chamber and outside to divest GLA pension investments in fossil fuels”.
In an earlier statement from the Conservative group, Bacon said: “Recent calls to stop City Hall’s pension fund from investing in fossil fuels are frankly irresponsible.
“At a possible loss of £25m (€35.7m) over 25 years, this could put thousands of people severely out of pocket, and all for a mere political statement.”
According to calculations by Europe Economics, an economics consultancy, a fund disinvesting from fossil fuels would sacrifice the equivalent of an annual return of 0.68% pa.
Bacon said applying this to the GLA’s share of LPFA holdings of fossil fuel investments equated with a lost return of approximately £1m per year.
Over a typical 25-year investment horizon for a pension fund, this becomes £25m.
In reply to the question, Johnson said: “I don’t have the power to direct the LPFA to do this.”
However, he added: “They [pension funds] have a fiduciary duty to get the best value for pensioners. And some of the pension funds for the most ‘right-on’ organisations have investments in heaven knows what to get the best value for their pensioners.”
Johnson added that, since he had become Mayor, carbon dioxide emissions in London had gone down 14% due to the use of technology and “technical fixes”.
“I’d rather see the money invested in those technical fixes than thrown away in some political gesture,” he said.
“The way to do this is to keep our strategy of reducing London’s carbon footprint, and the rest is just political window-dressing.”