With the threat of climate emergency ever present now is the time for local government to lead the way. Pension fund divestment means local councils ending large scale investment in fossil fuels. This motion can help your local area to increase the pressure to build a greener, fairer society.
Pension Fund Divestment from Fossil Fuels
This Council recognises that:
- Burning fossil fuels contributes significantly to global warming, jeopardising the stability of our climate upon which our well-being and economy depend. Such activity also has a negative impact upon air quality and so public health.
- Research demonstrates that 80% or more of the world’s proven fossil fuel reserves will have to remain unburnt if we are to have a reasonable chance of keeping global warming to well below 2 degrees Celsius, the globally agreed target for climate change mitigation.
- Since 80% of fossil fuels must remain in the ground, the reserves of the fossil fuel industry risk becoming ‘stranded assets’ with little or no value – representing a substantial financial risk for those that invest in them.
- Greater Manchester Pension Fund currently has around £1.7 billion invested in the oil, coal and gas industries. This is environmentally and financially irresponsible.
- To date, over 1,100 institutions representing over $14 trillion in assets have committed to divest from fossil-fuel companies. These include the World Council of Churches, the Irish state, New York City, the British Medical Association and a growing number of UK local authority pension funds.
- As a local authority with a commitment to become carbon-neutral by 2025, it is illogical for Oldham Council to make employer contributions towards a pension fund that is committed to investments in fossil-fuel companies.
- Not to invest directly in fossil fuel companies.
- To mandate its representative to the Greater Manchester Pension Fund Board to call for the adoption of Responsible Investment policies which:
- Immediately freeze any new investment in the top 200 publicly traded fossil fuel companies;
- By the end of this year, divest from direct ownership of companies involved in coal mining;
- Within two years, divest from direct ownership of all fossil fuel companies, along with any commingled funds that include any fossil fuel public equities and corporate bonds;
- Set out an approach to quantifying and addressing climate change risks affecting all other investments, and
- Focus future investments on areas that minimise climate change risk and, where possible, invest in local climate solutions that will benefit fund members, their families and the wider community.
- To ask the Chief Executive to write to the Leaders and Chief Executives of the other 9 Greater Manchester local authorities outlining this Council’s position and asking for their support.
Council pension funds have a huge amount of power but that will not be exercised by withdrawing. Rather than divestment, we should be much more active shareholders.
The way forward was shown recently in USA where activist funds kicked out two directors of Exxon oil and rejected a third nominee and elected their own people to the board because of the climate-change-denial of the old board. There are good fiduciary reasons as well: fossil-fuel companies are investing in what will become stranded assets.
More widely, we should be much more active on ESG (Environmental, Social and Governance) issues than we have been. It is time that our pension funds used their power to the wider benefit of their members and the wider community.
Lib Dems should lead on this but to do that means that we will have to work together. At the moment there is no means to do this: time to get going!
As the Chairman of the Oxfordshire Local Government Pension Fund Committee I have to point out that while the am of the motion is laudable, in practice it is extremely difficult to completely decarbonise pension fund investments because of the all pervasive presence of carbon in the economy. You can end up with remarkably little to invest in.