Press enquiries contact: Anna Galkina / Platform / @PlatformLondon 07942044472 / [email protected][1]

Full dataset available online[2].

  • Councils invest £16.1 billion of pensions into fossil fuel companies out of a total of £289.9 billion, new data reveals
  • No significant change on 2015 investments, despite pressure to take climate risk into account
  • Manchester, Dumfries and Galloway, Torfaen, Hammersmith and Fulham authorities are among the most exposed to fossil fuel investments

Data released today reveals that UK councils invest £16.1 billion[1] of their workers’ pensions into companies that extract coal, oil and gas, fueling dangerous climate change. While the United Nations meet in Bonn to discuss progress on Paris Agreement climate goals, the new data reveals that UK local government pensions are financially invested in the industry most responsible for climate change[2].

Compared to 2015 data, investments in fossil fuels have gone up in real terms (from £14bn) and did not change significantly in proportion to the size of the pension funds.[3] These figures show that councils have not made any significant changes to their investments in response to calls from the climate movement, governments, and shareholders to take climate risk into account, in the two years since the Paris Agreement on climate change.

Jane Thewlis, West Yorkshire Pension Fund member and divestment campaigner, said:

Our pensions are investing in the companies responsible for the climate crisis. This flies in the face of the Paris Agreement, and of all the efforts being made locally to reduce emissions and combat climate change. It’s time to divest.

George Guivalu Nacewa, Fiji Climate Warrior attending the COP23 talks in Bonn, said:

In the Pacific, the impacts of climate change are not a debate, it is our reality. We need to keep fossil fuels in the ground. We no longer have time to talk. Now is the time to act.

The data and online map released by 350.org, Platform, Energy Democracy Project, and Friends of the Earth ranks councils by their fossil fuel investments, and allows residents to see every company or fund their local council has invested into.

Several councils already committed to divest their pensions from fossil fuels. Waltham Forest Councillor Simon Miller (Cabinet Member, Economic Growth & High Streets, previously Chair of Waltham Forest Pension Fund) said,

I am proud that Waltham Forest has committed to divest from fossil fuels. Given current pressures on Local Authority budgets, our pension funds have a key role to play, not only in making our economy greener and our communities healthier, but as driver of sustainable, future focused investment in local areas.

Examples of councils making pension fund investments into clean energy infrastructure and public goods include:

  • Strathclyde Pension Fund invested £10 million in Albion Community Power, who own hydro stations with capacity to power 4,000 homes.
  • Falkirk Pension Fund provided £30 million for a major programme of 190 new homes, including council housing, in the Forth Valley.[4]
  • Lancashire County Council invested £12 million into Westmill Solar Co-operative, a community owned solar farm. [5]

In June 2017, UNISON, the largest trade union representing local government workers in the country, passed policy to “seek divestment of Local Government Pension Schemes from fossil fuels over five years giving due regard to fiduciary duty”.[6] Unison is represented on the boards of a number of the council pension funds.

In March 2014, following a clarification from the UK Law Commission on the interpretation of fiduciary duty, the Local Government Association (LGA) (England & Wales) published a legal opinion on how fiduciary duties affected the scope for a Local Government Pension Scheme (LGPS), concluding that “the precise choice of investment may be influenced by wider social, ethical or environmental considerations, so long as that that does not risk material financial detriment to the fund.”

 

COMMENT

Jane Thewlis, West Yorkshire Pension Fund member and divestment campaigner, said:

“Our pensions are investing in the companies responsible for the climate crisis. This flies in the face of the Paris Agreement, and of all the efforts being made locally to reduce emissions and combat climate change. It’s time to divest.”

George Guivalu Nacewa, Fiji Climate Warrior attending the COP23 talks in Bonn, said:

“In the Pacific, the impacts of climate change are not a debate, it is our reality. We need to keep fossil fuels in the ground. We no longer have time to talk. Now is the time to act.”

Stephen Smellie, Deputy Convenor in UNISON Scotland and National Executive Committee member for UNISON, said:

“Our priority always needs to be to ensure our member’s pensions are protected. We are increasingly aware that investments in fossil fuels are not only harmful to the environment but put the sustainable future of our pensions at risk. We have made progress with a few pension funds taking the steps towards divestment. We need to wake the rest up before our pensions are put at risk with investments that will lose value as governments take steps to reduce the use of fossil fuels.”

Platform campaigner Sarah Shoraka said,

“Local councils are gambling with our future. By continuing to heavily invest in companies like BP and Shell, local authorities are risking the future of our pensions and our climate.

Council pension funds have an opportunity to invest instead in things communities really need: affordable housing, public transport, and publicly owned renewable energy. Councils must divest to secure pensions and invest in our future.”

Friends of the Earth divestment campaigner Deirdre Duff said:

“It’s astonishing that councils across the UK are continuing to invest vast sums of money in climate-wrecking fossil fuels through their pension funds. With urgent action needed to tackle the climate change crisis our local authorities should be doing far more on this issue.

“Council pension funds should pull their cash out of coal, gas and oil and invest in the new technologies that are already helping to build a cleaner, safer future.”

Ellen Gibson, Divestment Campaigner with 350.org, said:

“With hurricanes devastating the Caribbean, wildfires ravaging southern Europe and flooding and drought destroying lives across the world – the impacts of climate change are hitting hard. Despite this, UK councils are still plowing billions into companies like Exxon, Shell and BP who have spent decades fuelling the crisis, and profiting on its back.

Climate change isn’t a problem for future generations – it’s happening now, and action has never been more urgent. Our councils, and all public institutions, must cut their ties with the fossil fuel companies responsible and divest.”

Ric Lander, Friends of the Earth Scotland Divestment Campaigner, said:

“Scotland’s councils are ignoring the realities of climate change. Their investments in deeply destructive fossil fuel companies fly in the face of Scotland’s wider efforts to phase out fossil fuel cars and ban fracking.

“Fossil fuel companies won’t be talked into dropping their core business of digging oil, gas and coal out of the ground. Councillors who oversee these funds need to take action to make their pension funds compatible with a future worth living in by divesting.”

 

NOTES

[1]. Full data and interactive map is be available at: https://gofossilfree.org/uk/fuellingthefire/[3]

The calculations of fossil fuel investments are based on investments in the top 100 oil & gas and top 100 coal companies according to the Carbon Underground 200 index 2016.

[2]. Data from July 2017 estimates that only 100 fossil fuel companies are responsible for 71% of global greenhouse gas emissions. https://www.theguardian.com/sustainable-business/2017/jul/10/100-fossil-fuel-companies-investors-responsible-71-global-emissions-cdp-study-climate-change[4].

[3]. See the 2015 dataset at https://gofossilfree.org/pensions[5].

[4]. See ‘Divest / Reinvest: Scottish council pensions for a future worth living in’ http://reinvest.scot/wp-content/uploads/2017/03/Divest-and-Reinvest-Scotland-Printable.pdf[6].

[5]. Source: https://1010uk.org/articles/could-pensions-divest-fossil-fuels-invest-community-energy[7].

[6]. For a copy of the resolution passed by UNISON see: https://www.unison.org.uk/content/uploads/2017/07/2017-National-Delegate-Conference_Decisions_Booklet_20170718.pdf[8] p92 onwards.

Endnotes:
  1. [email protected]: mailto:[email protected]
  2. Full dataset available online: https://gofossilfree.org/uk/fuellingthefire/
  3. https://gofossilfree.org/uk/fuellingthefire/: https://gofossilfree.org/uk/fuellingthefire/
  4. https://www.theguardian.com/sustainable-business/2017/jul/10/100-fossil-fuel-companies-investors-responsible-71-global-emissions-cdp-study-climate-change: https://www.theguardian.com/sustainable-business/2017/jul/10/100-fossil-fuel-companies-investors-responsible-71-global-emissions-cdp-study-climate-change
  5. https://gofossilfree.org/pensions: https://gofossilfree.org/pensions
  6. http://reinvest.scot/wp-content/uploads/2017/03/Divest-and-Reinvest-Scotland-Printable.pdf: http://reinvest.scot/wp-content/uploads/2017/03/Divest-and-Reinvest-Scotland-Printable.pdf
  7. https://1010uk.org/articles/could-pensions-divest-fossil-fuels-invest-community-energy: https://1010uk.org/articles/could-pensions-divest-fossil-fuels-invest-community-energy
  8. https://www.unison.org.uk/content/uploads/2017/07/2017-National-Delegate-Conference_Decisions_Booklet_20170718.pdf: https://www.unison.org.uk/content/uploads/2017/07/2017-National-Delegate-Conference_Decisions_Booklet_20170718.pdf