Mayor dismisses call to divest £4.8bn pension fund from oil, coal and gas saying UK needs fracking to avoid relying on energy imports

Boris Johnson has rejected a motion by the London assembly calling on City Hall’s pension fund to divest from fossil fuels, arguing the UK needs to press ahead with fracking to avoid being reliant on the Middle East and Russia for gas.

The mayor of London, who will attend cabinet from this week, said that a more realistic approach was needed than divestment, which he called a “sudden cliff edge”.

A transition away from fossil fuels was needed instead, the Tory MP said, blaming Labour for failing to invest in new nuclear power which he claimed had left the UK reliant on gas for its energy needs in the medium term.



“The question then is where does one source this natural gas? From Russia and the Gulf or from beneath our own feet?”he wrote to the chair of the assembly on Tuesday.

“That question clearly answers itself and we are therefore going to need to invest in exploiting our own domestic energy reserves and explore the potential for fracking in the UK.”



Johnson has been vocal before in his support for fracking, saying “no stone should be left unfracked in the cause of keeping the lights on.” Lancashire County council on Wednesday said that two much-anticipated and – delayed planning decisions on applications by shale gas company Cuadrilla to frack would be decided in late June.



The mayor was responding to a motion passed by the assembly in March calling on City Hall’s £4.8bn to divest from oil, coal and gas on climate change grounds. The non-binding motion required a response by Johnson who, as had been expected, said that he could not accept its call to divest.

He added that he had no power over the pension scheme, the London Pension Fund Authority, although he said it must act in accordance with its fiduciary duty.

Senior figures in the financial world including the World Bank’s chief and the governor of the Bank of England have warned of the financial risk to fossil fuel investments if governments act on carbon emissions to avoid dangerous warming, also known as the ‘carbon bubble’.



Jenny Jones, the Green party London assembly member who proposed the original motion, said: “The mayor’s reckless indifference will only hurt pension scheme members in the long run, whether from the havoc of climate change or a collapse in fossil fuel asset values.

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“I’m deeply frustrated that he won’t even get out of coal, for which there should be no future in this country or any other. If the pension funds take their fiduciary duties seriously, and if he were a serious mayor, then fossil fuel divestment should be at the top of their to-do list.”

“Time and again, he has demonstrated how little he understands these issues, whether backing fracking for fuels we cannot burn, or questioning the scientific consensus on climate change. London desperately needs a mayor that takes climate change seriously.”

Ben Stafford, head of public affairs at WWF UK, said: “Every investment in fossil fuels takes vital capital away from the growing renewable energy industry. There is overwhelming evidence that we are exposed to economic as well as environmental risk if we continue to burn fossil fuels.

“It is unfortunate that the mayor has not listened to the London Assembly on this issue. We hope that trustees of the pension fund will take a different view and realise the economic threats to their pensioners’ assets by retaining fossil fuel investments.”

On Tuesday, divestment campaigners suffered a setback when Edinburgh university, which has the third biggest endowment of any UK university, declared it would not pull its money out of fossil fuels following a campaign by staff and students. The university said it was better to engage with companies in the industry, and was not a “black and white” issue.