Councils called up on £14bn pension investments in fossil fuels

Danni Paffard, campaigner for 350.org, said: “This is the first time that the council’s full share portfolio has been made public”.

Christiana Figueres, the executive secretary of the UN Framework Convention on Climate Change, has been among those pushing for a shift in investments from fossil fuels to clean energies.

The figures were revealed after campaign groups including Friends of the Earth (FoE) analysed data acquired through freedom of information requests, detailing the assets held in the 101 pension schemes covering the UK’s 418 councils.

‘Although many local governments are already committed to action on climate change, their investments in the fossil fuel industry undermine these efforts, ‘ they wrote on their website.

“Local residents and pension-holders won’t be happy that their money is funding climate change”.

Instead of wasting £14 billion of public pensions on multinational climate wreckers, we could reinvest into renewables and housing that serve local residents, create jobs and safeguard pensions.

“There’s a strong ethical and financial case for local councils to divest from fossil fuels and reinvest into infrastructure fit for the 21st century”.

Cllr Chapman said the council is “aware of public concern” surrounding the divestment debate and that it recognises “there would appear to be increasing evidence of the damaging impacts that fossil fuels can have on the environment”. He said the issue fund was complex and the fund was developing its understanding but the process could not be rushed: “There are no plans to disinvest from fossil fuel companies in the medium term”.

He added that the council is preparing a “comprehensive paper” which will help to “generate the discussion around the long-term investment in fossil fuels”. On average, more than six per cent of local government pensions are invested in fossil fuel assets.

Founder and co-director of the Carbon Tracker Initiative Mark Campanale said renewable energy is an increasingly attractive industry to invest in. “If pension fund trustees fail to properly manage these risks and the value of the pension pots of members declines as a outcome, then trustees and investment managers could be sued for breaching their fiduciary duties”.

The Oxfordshire Pension Fund is administered by the county council but is not actually run by the authority.

The fossil fuel holdings of the pensions funds calculated by 350.org and its partners are for the financial year 2013-14, the latest data available. The fund provides pensions for council workers and related organisations in Edinburgh, East and West Lothian, and Midlothian.

Around three-quarters of the money invested in fossil fuels is in 10 companies led by oil and gas giants Shell and BP and mining company Rio Tinto, which extracts coal, according to the analysis.

The organisation’s claims that the council’s investments pose a “long-term financial risk to both savers and taxpayers”, leading recently to “considerable losses to pension funds”, is being challenged by the council. They argue such a move would empower local authorities to protect pensions while generating sustainable turnovers.

They say pension money should be put into projects that benefit the wider community while providing a secure return.