More than £36 million has been invested in fracking companies by Merton Council. The borough invested the highest percentage of its pension funds of all councils in London.

A total of 5.7% of the fund is invested in companies involved in fracking, which could include BP and Shell. 

Cllr Owen Pritchard, chair of Council’s Pension Fund Investment Advisory Panel, said the council is working to reduce investments in companies that promote fracking with a push for more ethical investments.

The 2016/17 pension fund annual report states that Local Government Pension Scheme Regulations require councils to address Environmental, Social and Governance (ESG) in investments.

The three categories aim to measure the sustainability and ethical impact of an investment.

Cllr Pritchard said: “As a council we take the effects to the environment seriously – this is reflected in the way we are now managing investments.

“We are working quite hard in trying to make the situation better. “From a personal position I think the number one priority for the council is to make sure that the pensions are fully funded.

“The second should be that the investments are ESG – There is a lot of evidence now that shows that ethical investments are just as strong as others.”

He added that he is confident that the pension fund will be invested more ethically in the future but said the change could take time. Merton Green Party has been calling for the council to stop investing in fossil fuels for the past few years.

Party member Pippa Maslin said: “‘Merton Green Party is intrigued to hear that Merton Council is now interested in ethical investment of its pension funds.

“Despite Mayor Khan’s divestment declarations, the council invests a notable 5.7% of its employees’ pension wealth in fossil fuels, and has been largely unresponsive to calls for a more progressive approach.”

Cllr Pritchard added that the council has now reduced the total investment to less than 1% and are in the ‘process of reducing our investment even further as part of a new investment strategy’.