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CLIMATE EMERGENCY: Councillors call on pension fund to stop investing in fossil fuels

CLIMATE EMERGENCY: Councillors call on pension fund to stop investing in fossil fuels

Leeds City Council’s climate emergency advisory committee recently recommended councils intervened to stop the fund investing in companies producing fossil fuels

Leeds City Council is calling on one of the region’s biggest pension funds to stop investing in fossil fuels, following a meeting of council decision-makers this week.

The West Yorkshire Pension Fund holds and invests pension monies for all public sector workers in the region’s five local authorities.

Leeds City Council’s climate emergency advisory committee recently recommended councils intervened to stop the fund investing in companies producing fossil fuels, and moving its current investments in such companies elsewhere (known as divestment).

It follows the council’s announcement of a climate emergency back in early 2019, which saw it commit to a net zero carbon economy by 2030.

While council chiefs agree in principle with the board’s recommendation to divest in fossil fuels, they disagreed with the suggested three year time limit, as there were concerns

Deputy leader of Leeds City Council Debra Coupar (Lab) said: “Everybody needs to act together over the climate emergency. We do know the West Yorkshire Pension Fund has performed well in its investments.

“However, I do think the one point we are not taking forward is around the three year timeline. I don’t think that is helpful to put a timeline on it.

“We have an aim to reduce those investments in fossil fuels to zero.”

The administering authority of the pension fund is Bradford Council, and Leeds City Council doesn’t have any decision-making power on the fund.

Coun Coupar added that the fund, reputedly worth around £15 billion, already invested around £750m into green energies.

Leader of the council’s opposition Conservatives group Coun Andrew Carter warned that committing to divestment too quickly would have a negative effect on the pension fund and its members.

He said: “A pension fund is there to make investments in the best interests of their members. That’s not the directors – it’s all the employees of five local authorities, whoever they are and whatever their pay.

“The pension fund should be reviewing its investments, and it should undoubtedly be looking at investments in fossil fuels, because if everything remains roughly as today, those investments in future could become investments that have lost their value.

“But that isn’t what is happening at the moment. Providing we get the assurance that the directors of the pension fund are constantly reviewing the investments with a view to moving them as and when the time is right, not for their own political agenda, but for the interests of their members.

“This includes thousands of members who are not highly paid.

“How many millions would it cost if we did what was suggested now? I understand it is in the millions of pounds. Does this council absorb those losses, or do we pass it onto our members? To the refuse collectors and the gardeners – is that what we do?”

A report, which went before executive board members, stated: “Although the council is not the decision maker in relation to the West Yorkshire Pension Fund, it makes a significant contribution and therefore can use its influence to encourage the adoption of divestment of fossil fuels as a policy.

“There is no doubt that divestment from fossil fuels must happen for both environmental and financial reasons.

“However the more challenging question is the timing of when that action should be implemented to ensure that the WYPF doesn’t suffer detrimental losses by either acting too soon or conversely by leaving it too late and being left with investment in stranded assets.

“Divestment from fossil fuels is still seen as a key step required in order to deliver the net zero goal. Our advice is to support a progressive, more transparent divestment rather than impose a three year absolute deadline.”

The executive board agreed to request that the pension fund “be explicit” about acknowledging the climate emergency and the need to divest from fossil fuels, as well as committing to look into an alternative, cleaner investment.

 

Words: Richard Beecham, Local Demcoracy Reporter


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