A councillor has welcomed a move that will see a pension fund used by Ceredigion staff and council members cut a total of 25 per cent of its fossil fuel investments after years of pressure, but warned it is “still not enough.”

Ceredigion councillors supported a motion that called on the Dyfed Pension Fund to disinvest from holdings with fossil fuel companies within two years in January last year, as part of its commitment to combating climate change.

The Dyfed Pension Fund announced at the fund’s Annual Consultative Meeting with stakeholders on 7 October that it has lowered its fossil fuel investments by 13 per cent in the past year and will achieve a further 12 per cent reduction in the coming financial year.

The steps by fund managers to reduce investments in the burning of fossil fuels - which contributes to climate change - has come following motions in Ceredigion and Carmarthenshire council meetings in the last two years which identified fossil fuel investments by the pension fund as “running counter to efforts by those councils to reduce their own carbon emissions.”

Aberystwyth county councillor and town mayor, Alun Williams, who proposed the successful divestment motion to Ceredigion council in January 2020, said: “The news that the pension fund is reducing its fossil fuel investments two years running is very welcome. “It’s not enough of course, and I want to see this progress maintained and built on, but it’s a start and it shows that the motions agreed by our two councils are having a real effect in practice.

“It was also good to hear that some of the investments are being transferred into renewable energy.”

The £2.7bn Dyfed Pension Fund, which has 51,500 members across a range of public sector agencies in Ceredigion, Carmarthenshire and Pembrokeshire, said it will move some of its assets into low-carbon equity portfolios in a move to reduce its carbon footprint by screening out fossil fuel and thermal coal exposure.

Responding to the council motions calling on the fund to divest, a committee meeting heard last year that it “has a fiduciary duty to seek to obtain the best financial return that it can for its members.”

“This is a fundamental principle of the management of Pension Funds that has been established in law,” fund members heard.

“However, as a long-term investor responsible for looking after the interests of our beneficiaries over many decades into the future, the committee recognises that climate change is a significant risk factor for our pension fund investments.

“At this point in time, the Fund believes active engagement with investee companies instead of full divestment is the preferred option to bring about change whilst managing overall investment risk issues.”