Brunel Pension Partnership in the UK says investment firms have until 2022 to reduce exposure to potentially harmful industries.
A UK pension fund with £30bn ($39.2bn, €35.6bn) under management says it will review asset managers that do not reduce investments in businesses with a high impact on climate change.
The Brunel Pension Partnership stated that businesses in which it invests must be taking action that ensures they meet the emission targets agreed at the 2015 Paris climate summit.
The company manages pension funds on behalf of nine local authorities in south-west England as well as for the Environment Agency.
The Bristol-based organisation also criticised the sector as “not fit for purpose”, reports The Guardian.
The firm uses some 130 investment managers including Aberdeen Standard, Invesco, Legal & General Investment Management, Royal London Asset Management and Wellington Management.
Research by the not-for-profit organisation InfluenceMap found that the portfolios of the world’s 15 largest asset managers were heavy in polluting companies.
“Climate change is a rapidly escalating investment issue,” said Mark Mansley, Brunel’s chief investment officer. “We found that the finance sector is part of the problem, when it could and should be part of the solution for addressing climate change.”
Brunel said it will also vote against re-appointing board members of companies that are not doing enough to address their carbon footprints and could sell equity stakes from 2022 onwards.
Last week, BlackRock, the world’s largest investment manager and another Brunel asset manager, said it will divest from companies producing thermal coal and increasingly offer fossil fuel-free products.