Climate ChangeRecent Post

UK councils still invest in fossil fuels despite declaring climate emergency | Fossil fuel divestment

Local councils that have declared a climate emergency are continuing to pour money into fossil fuels through their staff pension funds, analysis has shown.

Nearly £10bn worth of investments in fossil fuels, including oil and gas companies such as BP and Shell, were found in local government pension funds in the last financial year, according to an assessment by the campaign groups Platform and Friends of the Earth.

Councils in Greater Manchester, Strathclyde, West Midlands and West Yorkshire had the biggest investments in fossil fuels, accounting between them for nearly a fifth of local government pension fund fossil fuel investments in the UK. The Greater Manchester combined authority had more than £1bn invested in fossil fuels in the financial year 2019-20, accounting for nearly 5% of its pension fund, with the other three areas at about £500m in investment each.

All of these combined authorities have declared a climate emergency. Councils often join together to invest their pension funds, so the funds do not always correspond exactly to specific local authorities.

Councils have been reducing their exposure to high-carbon investments. Similar research in 2015 found £14bn was invested in fossil fuels.

Several other smaller pension funds also had about 5% of their assets invested in fossil fuels, including Teesside, Dyfed and Dorset.

Three companies alone – BP, Shell, and BHP – account for about 40% of all direct investments in fossil fuels by local council pension funds. Of the fossil fuel investments by councils, the majority – about £6.5bn out of £10bn – were in oil and gas, but about a third of the investments were in coal. Coal has become a hot issue for councils as Cumbria is reconsidering a new coalmine, after outrage when the government gave green light to the proposal.

Campaigners said the findings showed councils must take action to ensure their funds were not supporting fossil fuels. Rianna Gargiulo, a divestment campaigner at Friends of the Earth, said: “Declaring a climate emergency may garner good headlines, but too often it seems to stop there. Councils can’t make a bold claim about saving the planet while continuing to invest in fossil fuels. Local authorities have the power and duty to ensure local workers not only have a pension for their retirement, but also a future worth retiring into.”

Robert Noyes, a campaigner at Platform and co-author of the report, said: “Local councils can and should be using their pension funds to support local investment priorities. Instead of making risky bets on fossil fuels, let’s channel the wealth in our pensions to local communities and build a better world beyond the pandemic.”

Several councils told the Guardian they were reviewing their pension investment strategies, in line with their declaration of a climate emergency. A spokesperson for Somerset county council said: “The committee is committed to a review of its investment strategy in 2021, which will include a full review of the fund’s approach to ethical, social and governance (ESG) issues and will include a review of the approach to climate change.”

Some felt divestment was not necessarily the way forward. A spokesperson for Strathclyde pension fund said although they agreed that transitioning to a low-carbon economy was essential, “the fund has felt that divestment is a blunt tool in terms of securing that transition to a low-carbon economy and not on its own radical enough to have a meaningful impact on the climate emergency. Instead, it has preferred to be an activist investor – pushing for improvements on everything from carbon disclosure and lowering emissions, while committing hundreds of millions of pounds into a range of renewable energy projects.”

Others pointed to the environmental work they were doing in different areas. Steven Coutts, the leader of Shetland Islands council, said: “We have acknowledged that there needs to be a step change in the global response to climate change and we are actively engaged in the energy transition, working with the oil and gas industry to transition to net zero by electrification, utilising onshore and offshore wind.” He also referred to the council’s work on creating a green hydrogen export business.

Cllr Andy Canning, the chair of the Dorset county pension fund, said: “We are fully supportive of the declaration of a climate emergency and have made changes that will deliver significant reductions in our carbon footprint. Our intention is to substantially reduce our carbon footprint without sacrificing returns.”

However, some pension funds will take many years to decarbonise their schemes at current rates. Wirral council said work to do so had been under way for five years and would continue for the next decade or more. Cllr Pat Cleary, the chair of Wirral’s pensions committee, said: “The goal is to align the fund’s investment strategy with Paris’s timescales, which sets the period up until 2030 as our critical milestone for further decarbonising the portfolio on the way to 2050.”

Source link

Comment here

This site uses Akismet to reduce spam. Learn how your comment data is processed.