Transport for London Pension Fund, London, should divest its holdings in fossil fuel companies and develop an annual report on performance against net-zero targets, according to calls by a London governmental body.
The Greater London Authority committee, which oversees the London Pensions Fund Authority and TfL Pension Fund, launched an investigation as part of a review into its pension funds' investments and costs. The pension funds had about £22 billion ($27.1 billion) in combined assets as of March 31, 2022.
In a report summarizing the findings, the committee said that the TfL Pension Fund "still invests in extractive fossil fuels," and the fund has not published targets to eliminate them from its investment portfolio. The value of its fossil fuel exposures could not be learned.
The committee also said it did not know if the pension fund will report its performance against its net-zero target annually, while its net-zero action plan has not been published online.
In a response to the committee, also published in the report, Padmesh Shukla, CIO of the TfL Pension Fund, said: "We are trying to hold a diversified portfolio and, clearly, one may think oil and gas is bad, but there is a role for these stocks in the short-term. We are still reliant on energy."
"It is very easy for us to hit the targets just by divesting from anything we hold in oil and gas," he added.
Mr. Shukla said that divesting leaves no option for pension fund trustees to engage with companies.
The committee also called on LPFA and TfL Pension Fund to commit to the London Fund and increase their investments in London-based companies. The London Fund, a partnership between local authority pension fund pools London CIV and Local Pensions Partnership Investments, invests in housing and infrastructure projects that tackle local housing issues.
"The committee believes there are opportunities for the LPFA and the TfL Pension Fund to work more closely together to promote social benefits through investments, where there are shared objectives and interests," the report said.
The £7.6 billion LPFA invested about 6% of its assets in the U.K., while the £14.4 billion TfL Pension Fund invested approximately 15% of its assets in U.K. companies.
Mr. Shukla could not be immediately reached to respond to the calls or comment about the size of investments in fossil fuel producers.
