Charlie Bedwell investigates the percentage of pension funds invested in the fossil fuel industry.
In May 2019, Parliament announced a Climate Emergency. Although there is no one definition of “Climate Emergency”, the declaration has seen government set important goals such as reaching net zero emissions by 2050. Whilst this was a huge step in the right direction, the announcement demonstrates a willingness to discuss environmental issues without legally requiring any action to be taken.
An analysis published by Platform and Friends of the Earth this year suggests that local authorities are not acting in line with our expectations of a country that has acknowledged the Climate Crisis and are in fact still investing billions of pounds in fossil fuels. This indicates to us that the Climate Emergency, whilst encouraging discussions such as these, needs to go one step further to ensure that they are not necessary.
The analysis of local investments in coal, oil and gas reveals that local government pensions have approximately £10 billion invested in fossil fuels, an average of 3% of all investments. The graph below shows where South Yorkshire lies in comparison to other local authorities.
This means that each person who has invested into their pension fund has had around £1,450 of their money invested in the industry. These figures are made even more worrying when we consider that Shell, BHP and BP collectively make up ~40% of investments and are all part of the 20 corporations that are responsible for 1/3 of global emissions. Supporting such companies during a Climate Emergency is irresponsible and contradicts all goals to reach net zero emissions by 2050 . But how can we make local authorities hear our voices?
Fighting climate change on this level is challenging. In recent years, more people are voting with their wallet by considering where their money is going and its effect on the environment. When it comes to your pension however, this is not an option. Slightly less than 7 million people rely on their pension schemes during retirement and so they cannot simply opt out or move their money elsewhere. Instead, this report and those before it are encouraging people to join divestment campaigns and encourage councils to release statistics on their investments. Slowly but surely, we are starting to see their effects.
By January 2020, half of the UK’s universities had committed to divest, with Oxford and Cambridge following later in the year. Oxford has also gone one step further in requiring all the businesses in its portfolio have a net-zero strategy – an excellent example of the effect that an organisation, industry or authority can have not just on its own eco strategies but on those of others. Local authorities should be looking to these leading institutions and realising that removing investment in fossil fuels does not have to be detrimental to your finances. Friends of the Earth and Platform would go one step further and say that investing in renewables is actually financially beneficial, environmental crisis aside. Each year, fossil fuel stocks are going down, a pattern exacerbated by the current coronavirus pandemic. On the other hand, investment in renewable energy is increasing by 20%. If investors do not move their investments before the crash of fossil fuels, their money will become trapped.
In 2019, we were given 11 years to save the planet. Using pension funds to invest billions in fossil fuels with just 9 years left to make critical changes is not encouraging but the resistance that we are seeing towards this is hopeful. To investigate your local authorities investments, visit divest.org.uk/councils and if you’re feeling like a revolutionary, get in touch with them!
About the Author: Charlie Bedwell is an English Masters student who is using her passion for writing to spread the green word.