The mayors of New York City and London urged other cities to divest their pension funds from fossil fuel producers on Jan. 7, as they introduced a toolkit to help cities shift investments away from companies that drive climate change.
New York City said in January 2018 that over five years it would remove fossil fuel investments from its public pension funds, which then had $189 billion in assets under management.
London Mayor Sadiq Khan pledged to do so in his 2016 election campaign.
Investors with $11 trillion in assets under management have pledged to divest from fossil fuels, campaign group 350.org said in a September report.
"We need all cities to act now to help protect our planet for future generations," Khan said in a statement, which accompanied an advice guide for other cities on how to alter their pension investments.
It contained case studies of disinvestment efforts in Melbourne, Berlin and Stockholm as well as New York and London.
"I'm calling on every major city in the world to follow suit," the mayor said, noting that "taking action on divestment is not only achievable but absolutely necessary".
Archbishop Desmond Tutu, of South Africa, and former U.S. Vice President Al Gore also reiterated their support for divestment at a meeting in Cape Town on Jan. 7.
"Any organization committed to operating responsibly in this new decade has a moral imperative to stop participating in financing the destruction of human civilization's future," they said in a statement.
London reduced the share of fossil fuel holdings in its pension funds to 0.4% by March 2019, according to C40 Cities, a coalition of cities committed to taking action on climate change.
It did not specify if this included funds directly controlled by the mayor, or the London Pension Fund Authority, which is independently run and had just over 6 billion pounds (US$7.9 billion) in assets under management at the end of March 2019, according to its accounts.
The London mayor's office was not available to comment.
New York's divestments are "still in progress," said Friederike Hanisch, who manages the C40 Divest/Invest Forum of 14 cities that have pledged to divest from fossil fuels.
She said divestment efforts were expected to improve rather than hurt returns for investors.
None of the C40 cities that have divested their pension funds has seen worse performance and some have done better by removing fossil fuels, C40 said.
"We don't expect it to have a negative effect at all on the income of pension funds," Hanisch said. "If anything we expect it to have a positive impact."
So far, a growing fossil fuel divestment push has not substantially impacted fossil fuel company share prices or reduced carbon emissions, economists Robert Pollin and Tyler Hansen of the University of Massachusetts at Amherst, said in a 2018 paper.
But the push is effectively raising awareness of growing climate risks, they said.
Assets in funds that have committed to divest from fossil fuels were worth $36 billion that year, the report found.
Some coal, oil and gas companies have said they see the divestment campaign as a "material risk" that could make it harder to source investment.
Paul Fisher, a fellow at the Cambridge Institute for Sustainability Leadership at Cambridge University, said the city divestment push was "part of a general trend" toward shifting money from fossil fuels and that trend "is making fossil fuel companies sit up and take notice."