Recent news from The Ferret, we should be doing better, articles like this should not be necessary!
“Communities around the world are calling for an end the environmental destruction that comes with coal mining, fracking and deep-sea oil,” said Ric Lander from Friends of the Earth Scotland, one of the groups that compiled the data.
“Our pension money shouldn’t be fuelling this damage . At a time when public resources are being squeezed, we should be redirecting this money to socially useful projects such housing and clean energy.”
Dave Watson, Scottish organiser for the trade union, Unison, which has 90,000 members in the pension schemes, pointed out that councils had a legal duty to cut carbon emissions. “Divesting from fossil fuels is the prudent way for councils to meet both their fiduciary duty to members and their public law duties,” he argued.
The Green MSP, Alison Johnstone, accused local authorities of playing “reckless games” with their employees’ money. “Oil, gas and coal are running out, and the fossil fuel industry is no longer a sustainable, sensible investment choice,” she said.
The fossil fuel industry is no longer a sustainable, sensible investment choice GREEN MSP ALISON JOHNSTONE
The Ferret has previously reported that five of the 11 local government pension schemes in Scotland were investing £1.1 billion in fossil fuel companies in 2013. The new analysis shows that investments from those five schemes increased by £300 million to £1.4 billion, suggesting that investments are rising overall rather than falling.
Independent councillor Jim Orr, a member of Edinburgh City Council’s pensions committee, described fossil fuels as “unsustainable and hugely damaging”. He called on pension scheme members to pile on pressure for investment strategies to change.
Kirsty Noble, who is a member of the Strathclyde pension fund, urged councils to take the lead. “These investments are increasingly risky and local authority funds seem to be overexposed to this risk,” she said.
According to the Convention of Scottish Local Authorities (COSLA), pension investment strategies were regularly reviewed. “Each fund needs to balance various priorities for investment together with the responsibility to ensure that they achieve a decent return on investment,” said a COSLA spokesman.
“The picture across Scotland is more varied than has been suggested with many funds investing in environmentally responsible companies and in local infrastructure projects.”
Oil and Gas UK, which represents over 500 companies, didn’t want to comment on the commercial decisions of individual organisations. But it stressed that everyone’s daily life depended on ready access to energy.
“Global population is projected to grow by 20 per cent over the next twenty years and energy demand rise by one third as the quality of life improves in many countries around the world,” said the group’s economic director, Mike Tholen.
“Even with rapid growth in renewables and significant improvements in efficiency, oil and gas will be needed to supply at least 50 per cent of global energy demand in 2035. Divestment of oil and gas is not the solution and will only make the challenge of meeting global energy demand all the greater.”
This was disputed, however, by 350.org, the environmental group leading the growing divestment movement. “Public investments in fossil fuels are fuelling dangerous climate change, and present a threat to pensions ,” stated the group’s Danni Paffard.
“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.”
Where Scotland’s pension funds are invested
|Company||Investment by Scottish local authority pension funds|
|Royal Dutch Shell||£31.2m|
Source: Scottish local authority pension schemes/Friends of the Earth Scotland
A version of this story was published by the Sunday Herald on 20 September 2015.