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How London and Boston are using their financial muscle to divest from fossil fuels

The mayors of London and Boston set out a vision for how major cities can lead the way to net zero.

By Sadiq Khan and Michelle Wu

In the spirit of accelerating climate action, the upcoming UN Climate Ambition Summit holds the promise of a brighter, more sustainable future for our planet. As world leaders gather at the UN General Assembly, it is increasingly clear that cities will be at the forefront of efforts to protect our planet and build the new, green economy.

In a world threatened by climate upheaval, where the scars of devastating wildfires, lethal heat waves and catastrophic floods are etched into our collective memory, leaders around the globe have a responsibility to act. Last summer, London saw 40-degree heat that created the busiest week for the London Fire Brigade since the Blitz. This year, record-breaking heat waves and smoke from Canadian wildfires caused air-pollution levels five times higher than average in Boston and across North America. 

Given that this is only a trailer for the main show, we can’t afford to allow warming to increase more than 1.5°C above pre-industrial levels. 

Against this backdrop of escalating crisis, London and Boston are determined to lead through action, joining forces to champion a monumental initiative to preserve our future. C40, a global network of mayors of major cities, has established an agreement: divesting from fossil fuels, investing in a sustainable future, or the divest/invest accelerator. In this unprecedented collaboration, 19 cities, spearheaded by London, are advocating green finance, divesting from fossil fuels, and catalysing investment in climate solutions.

Together these cities represent more than 50 million people and over $360bn in assets under management. Our partnership amplifies the millions of voices worldwide that have recognised the need to transition incentives away from practices that harm our planet and encourage responsible investments in a more equitable, resilient future for all. London has the ambition to achieve net zero by 2030 – a commitment unmatched by any comparable city. We are taking bold strides to clean up our air and bring down emissions – expanding the Ultra Low Emission Zone London-wide – making it the world’s largest clean-air zone, bringing solar to London’s rooftops through group-buying projects such as Solar London Together, delivering a third of the UK’s electric-vehicle charging points, and operating the largest fleet of electric buses anywhere in western Europe.

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[See also: Why New York and London are betting on climate budgets]

We’ve also allocated £90m to support the delivery of a £500m Green Finance Fund to support projects that help London meet its net zero ambitions. This fund will act as a magnet for further private-sector investment to support low-carbon projects and create green jobs. The result? London is steering towards a fairer, more prosperous carbon-free capital, a testament to the power of determined climate leadership.

Across the Atlantic, Boston is embracing possibility with equal parts creativity and urgency. In 2021 – just two weeks into a new administration – the City of Boston signed an ordinance mandating the divestment of more than $1bn in trusts and invested assets from fossil fuels by 2025 – charting a course towards a greener future. And while Boston is on track to be fully divested from fossil fuels by the end of 2025, this divestment is just the first of many steps in a longer journey towards creating a broader, sustainable investment strategy that doesn’t just slash emissions, but creates jobs, empowers local businesses and stimulates green innovation.

That means continuing to advocate divestment in the city’s pension fund while weaving climate resilience and climate equity into every decision we make. This includes implementing coastal resilience solutions for our most vulnerable neighbourhoods and making green infrastructure standards the default across all our streets, as well as electrifying our school bus fleet and banning fossil fuels in new city buildings, including public housing.

At the core of this movement lies the understanding that city pension funds and investors wield enormous influence. In London, the London Pension Fund Authority, steering almost £8bn in pension savings, has sent a powerful message by eliminating extractive fossil fuel investments and committing to a net-zero portfolio by 2030 – making clear its priorities for a healthier planet.

But these actions resonate beyond balance sheets. They represent a steadfast commitment to safeguarding the planet and ushering in a new era of green investment. The global shift towards clean-energy leadership is undeniable. And by reallocating funds to sustainable solutions, local governments have the power to highlight how green finance can drive both climate resilience and economic prosperity. 

As the mayors of Boston and London, we are committed to building a world where cities’ bold leadership on green finance paves the way for global change. We are sending a clear message that now is the time for action – and we invite cities across the globe to join us. Together, we have an opportunity to not only save the planet, but build a better version of it in the process.

[See also: Mapped: Rising sea levels are reshaping the world]

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