As at March 2018, Nottinghamshire Pension Fund (Notts PF) invests over £5bn on behalf of more than 136,000 members. Over £300m is in fossil fuel companies, over £200m of this in fracking companies. The biggest investments are in Shell, BP, BHP Billiton and Rio Tinto. There are also big investments in HSBC and Barclays Banks which have funded large scale coal extraction around the world.
In 2015, we started a campaign to persuade the Fund to get its investments out of fossil fuels. At the Fund’s AGM in 2015, people with pensions in the Fund asked a number of questions. (See 2015 report.)
At the 2018 AGM, members of the Fund raised a number of further issues:
- Unison’s 2017 conference agreed to campaign for divestment from fossil fuels and call on pension schemes “to invest safely for pension holders’ well-being by disinvesting over 5 yrs and reinvesting into the just transition”. Will Notts PF meet Unison to discuss this?
- Why is there no analysis of the risk to investments associated with the climate crisis in the Annual Report?
- Why has there been a complete lack of urgency in changing to indices which exclude fossil fuel companies?
- The Department for Work and Pensions has introduced regulations for trust-based pension funds requiring financially material considerations, including climate change, to be addressed in a Statement of Principles. Will Notts PF follow a similar approach?
- The Parliamentary Environmental Audit Committee has recommended that pension funds should have to report their exposure to climate change risks and opportunities. Will Notts PF do this?
- Notts PF has over £300m invested in fossil fuel equities, over £200m of this in companies exposed to the fracking bubble. How much longer before Notts PF heeds warnings about investment in fossil fuels?
- How much of the Fund is invested in renewable energy and/or low carbon infrastructure.
The questions and answers are available on the County’s website and copied here. The answers can be summarised as: No, they won’t do any of this because they don’t have to, so there. They appear to even be completely unable to say how much of the Fund is invested in renewable energy.
Unacceptable long term risk
Our argument is that investing in fossil fuels is an unacceptable long term risk. To tackle climate change most of the known fossil reserves will have to be left in the ground – and become worthless as ‘stranded assets’. While it would not be prudent to sell all fossil shares immediately, funds should at least agree a phased withdrawal – such as:
- get out of the most risky and polluting activities (e.g. coal mining and tar sands) totally over 2 or 3 years;
- over the same time progressively move shares out of oil and gas into a fossil-free index;
- increase investment in local low carbon initiatives such as renewable energy and energy efficiency;
- accepting that funds will wish to ‘engage’ with large companies through voting their shares at AGMs, they should set a goal for them to change their business models to bring them into line with the global climate commitments agreed at Paris in 2015 – and if the goal is not met the fund should divest from that company.