Shropshire’s £2 billion public sector pension fund has rejected calls to pull out of fossil fuel investments by 2023.

The committee overseeing Shropshire County Pension Fund voted not to immediately pursue a programme of divestment, as called for by Shropshire and Telford & Wrekin councils, at a meeting on Monday.

Members instead said they would heed the advice of the fund’s investment managers and consultants, who had recommended to instead work towards getting its portfolio to net zero carbon by 2050.

However the committee said it would not rule out divestment as part of the wider net zero strategy, but would leave it to fund managers to weigh up the companies’ carbon reduction progress with the financial interests of fund members.

The decision not to immediately divest was met with “shock and anger” from campaign group Fossil Free Shropshire, which staged a dramatic ‘oil pour’ protest as members arrived at the meeting on Monday to illustrate the disastrous impact it said fossil fuel companies were having on the environment.

Jo Blackman from the group addressed the committee at the start of the meeting and handed over 1,000 postcards signed by residents of the county on support of divestment.

Ms Blackman said: “I urge the committee to align itself with the tide of public opinion and the wishes of employers, fulfil its fiduciary duties and be on the right side of history.”

The committee, which brings together members of both councils as well as non-voting employee and pensioner representatives, then received the fund’s second annual climate risk report.

The report, from asset management firm LGPS Central, said the fund’s carbon footprint had decreased by 9.9 per cent in the last year.

Shropshire councillor Roger Evans voiced concern that some of the companies the fund is invested in “do not seem very committed” to carbon reduction. LGPS representatives agreed there was “ambiguity” with lots of talk of “ambition” but not “commitment”.

James Walton, executive director of resources at Shropshire Council, told members they had to weigh up whether there was “strong evidence” that divestment “actively delivers” on climate change ambitions and/or ensuring the fund is fully funded – or whether it would “actively work against both these priorities”.

Mr Walton said the committee also needed to consider whether “a decision to divest unreasonably transfer[s] investment risk decision-making directly to pension committee members” and whether other options – namely engagement – could better fulfil these priorities.

Councillor Healy said the two did not have to be mutually exclusive, adding that divestment would be crucial in achieving the desired net zero outcome.

However Patrick O’Hara, director of responsible investment at LGPS, responded: “It’s not strictly speaking true to say you can’t achieve net zero in an investment portfolio and invest in fossil fuels.”

Following the meeting, Fossil Free Shropshire spokesman Jamie Russell said: “We have been left in a state of shock and anger by this vote.

“The pension committee has ignored all the evidence that divesting from fossil fuels would be financially better for the fund’s profits and would help Shropshire meet its 2030 net zero pledge.

“This vote makes it painfully clear that Shropshire is not the climate leader it claims to be.”