Local governments in the UK have pension funds worth over £230 billion. £14 billion of this – over 6% – is invested into fossil fuel corporations.
The briefing Local Government Pensions, Fossil Fuels & the Transition to a New Economy analyses the breakdown of investments of all UK local authorities through their 101 pensions funds, responsible for 4.6 million employees. Platform has released the full data here, together with 350.org, Community Reinvest, Friends of the Earth Scotland and Friends of the Earth England, Wales & Northern Ireland.
We know that 80% of the world’s oil, coal and gas reserves need to stay in the ground, to prevent catastrophic climate change. Local authorities were at the forefront of divesting from apartheid in the 1980s. City, borough and county councils have the opportunity to lead again, by divesting from fossil fuels.
This is a moral argument. Pensions are for our and our families’ future. But that future is threatened by fossil fuel extraction.
It is also a financial argument. When governments finally take climate change seriously and legislate to leave fossil fuels in the ground, shares in oil, gas and coal will become worthless. Funds which don’t invest in fossil fuels often perform as well or better than fossil-fuel heavy funds, so divestment does not mean that existing pension funds lose out.
And it is a public benefit argument. £14 billion could build over 200,000 homes or generate more electricity than Scotland uses. By investing this capital into renewable energy, public transport and social housing, local government could create jobs and boost local economies, while protecting pensions.