The Oxfordshire Local Government Pension Fund has announced plans to exclude fossil fuel investments, with the full value of the fund’s passive equity investment, worth around £530m, to be moved into a newly launched Paris Aligned Benchmark Fund.

The move, voted through by the fund's committee this week, will effectively exclude all investments in coal, oil and gas companies, with the new fund expected to deliver annual emissions reductions of at least seven per cent per annum.

The new benchmarks were developed by FTSE Russell and Brunel Pension Partnership, and will provide the fund a new way to target Paris alignment with passive investments.

In addition to this, the pension fund has confirmed that it achieved a 17.7 per cent reduction in emissions across its measurable investments over the past year, and decreased exposure to fossil fuel reserves by over 30 per cent.

Commenting on the news, Oxfordshire Pension Fund Committee chair, Councillor Bob Johnston, said: “There are many different arguments over the most effective climate investing strategy or policy, but the real proof is in the numbers.

“On that basis, Oxfordshire Pension Fund has made an exceptionally strong start, far outperforming its interim target in its first report, and putting it very much on track to deliver on its pledge to be Paris-aligned across all pension investments.”

Oxfordshire Pension Fund Committee member and Green Party Councillor, Jo Robb, added: “The committee's decision to invest in a fund that excludes fossil fuels and rapidly reduces emissions is critical.

"In the light of recent extreme weather events, the dire warnings of the most recent IPCC report, and the upcoming COP26 summit in Glasgow, local councils across the UK must show the leadership the situation demands. I hope this commitment will be one of many in the months to come.”

The announcement has also been welcomed by campaign groups, as Fossil Free Oxfordshire spokesperson, Al Chisholm, highlighted the plans as a “critical step” on the path to investing for a safer climate and more just world, congratulating the committee for taking this “decisive and forward-looking step”.

Adding to this, Platform energy economist and UK Divest co-ordinator, Robert Noyes, emphasised the need for more schemes to take action on climate issues, stating: “In the run-up to COP26, councils across the UK have an important decision to make.

“To hope beyond hope that engaging with fossil fuel companies - who denied the climate crisis for decades, and spent just 1 per cent of their annual capital expenditure on clean energy in 2020 - will magically work this time, or join the US$14.5trn coalition of climate leaders in ending fossil fuel investment.”

Platform has also previously urged Local Government Pension Schemes to take steps to divest from fossil fuels, despite research from the group revealing that Local Government Pension Scheme funds' fossil fuel investments had fallen to £9.9bn since 2017.

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