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Going for gold: Westminster City Council’s Pension Fund accolade

Published: 9 March 2023

Westminster City Council’s £1.8bn pension fund has been granted gold standard status for its ethical stance and investment management principles.

Under the UK Stewardship Code, signatories must create long-term value for their beneficiaries which lead to sustainable benefits for the economy, the environment, and society.

Cllr David Boothroyd, Westminster City Council’s Cabinet Member for Finance and Council Reform, said:

“We know how tough it is to be accepted, so this is a huge success for the team.

“As a council we are very proud that our pension fund has been recognised for its ethical investments and sound management.

“As a Council we have pledged to create a Fairer Westminster – and this is recognition that we are achieving that goal.

“Because it is something that not only applies to the front facing services that our residents can see, but to every aspect of what we as a local authority do.

“Being granted this status shows that we are committed to doing right not only by the fund’s beneficiaries, our residents, and the planet.”

The scheme is regulated by the Financial Reporting Council, the auditors, accountants, and actuaries watchdog, and applicants must demonstrate how they have applied the Code’s Principles in the previous 12 months, supported by detailed reporting including activities and outcomes.

In its application the Pension Fund outlined the vision and culture at the heart of its investment principles.

These include:

  • A commitment to the Pension Fund being greener: with a 75 per cent reduction in its carbon emissions since 2019
  • We have moved a third of our equity portfolio away from funds that invest in tobacco, alcohol, gambling, weapons, fossil fuels, and gas or electrical utilities. With the remaining equities transitioned into low carbon versions.
  • Investing in renewable infrastructure projects such as solar power, onshore and offshore wind, alongside supporting infrastructure
  • Financing national affordable housing and socially supported housing with the long-term goal of providing 13,000 new homes that cost no more than 35 per cent of a household’s gross income

It continued:

“The [Fairer Westminster] strategy has ambitions to put residents at the heart of key decisions and build an inclusive and diverse culture and community within the city.

“The pillars can be aligned with the Pension Fund’s investment strategy, with the Fund’s commitment towards affordable and socially supported housing, investment in renewable energy infrastructure and transitioning assets into funds, which take account of social and environmental impacts.

“The Fund promotes a strong sense of accountability and transparency across the organisation, especially with its beneficiaries. Operating under public sector regulations dictates that the Pension Fund must regularly respond to Freedom of Information (FOI) requests, which requires the Fund to act fairly and be held accountable for key decision making.”