Scottish councils slammed for investing £1.7bn into climate-wrecking pension funds

A report by thinktanks, unions and environmental charities finds Scottish councils undermining the Paris climate deal

SCOTTISH COUNCILS are investing billions of pounds of their workers’ pensions into companies responsible for environmental damage and climate change, according to a new report published by the thinktank Common Weal, Unison Scotland and Friends of the Earth Scotland (FoES).

The report, called Divest and Reinvest Scotland, shows that £1.7bn has been invested in fossil fuels despite the Scottish Government and others pledging to uphold last year’s historic Paris climate deal which sought to tackle structural connections to polluting industries.

This means that that the average council worker has the equivalent of £3,300 invested in fossil fuels linked to their pension fund.

Charities state that to ensure workers’ pension safety and protect the einvironemnt, local authorities must divest from such schemes.

“Divesting from fossil fuels is an opportunity to contribute to a brighter future and put money back into local economies.” Ric Lander

Ric Lander, divestment campaigner at FoES and the report’s author, said: “Council pension funds have huge clout and can shape our future. It's time they used this power to invest in a future worth living in.

“Divesting from fossil fuels is an opportunity to contribute to a brighter future and put money back into local economies. That would be good news for fund members and good news for all of us.”

According to the report 4.8 per cent of the Scottish local government pension scheme is invested in fossil fuels with £543m being directly connected to oil and gas and £113m to coal.

The Strathclyde pension fund, administered by Glasgow City Council, tops the list with £889m invested in fossil fuels. This is followed by Tayside with £131.1m invested in fossil fuel related pension funds, local authorities in the North East at £124.1m, Falkirk at £119.6m, Lothian at £104.3m, Highland at £92.3m, Fife at £89.6m, Dumfries & Galloway on £70.5m, Shetland on £30.8m, Scottish Borders on £23.4m, and Orkney with £8.2m.

In addition to these figures only 6 out of the 11 Scottish councils who run pension funds have ever had dedicated discussions at council board level on climate change. By comparison, Haringey, Waltham Forest, Southwark and South Yorkshire, have committed to cut their fossil fuel investments, undermining Scotland’s claim to be a leader on climate issues.

The report found that only three councils were activley investing in socially and environmentally beneficial infrastructure. The Strathclyde, Falkirk and Lothian pension funds invest a combined £234 million in renewable energy and social housing. Although encouraging, this represents just 0.7 per cent of the Scotland-wide scheme’s value.

“Too many of our pension funds are investing in obsolete technologies and risking our members hard earned contributions.” Dave Watson

Unison Scotland organiser Dave Watson said: “Too many of our pension funds are investing in obsolete technologies and risking our members hard earned contributions. The future of energy is green, and it is within sight. Our pension funds need to be part of the future, not the past.”

There has been severe crtiicism from pension fund members themselves such as Jude Ferguson from Lothian who worries that such investments are short term in scope and outcome.

She said: “What is the point in saving for a future that my pension money is helping to destroy? I want to, and believe I can invest in a future that invests in the planet.”

Companies like BP, who are invested in through indirect and direct pension schemes, are responsible for fracking and drilling for oil in the Arctic as well as lobbying against subsidies for renewable energy. BHP Billiton, the 12th largest extractor of coal in the world, is currently mining in the Borneo rainforest and faces legal action as a result of its part in Brazil’s worst ever environmental disaster.

“Realistically, many active, responsible investors like SPF are already progressively ‘de-carbonising’ by shifting investment to renewable energy.” Strathclyde Pension Fund

Speaking to CommonSpace, a spokesman for Strathclyde Pension Fund said: “Strathclyde Pension Fund is a strong supporter of the transition to a low carbon economy and is putting climate change at the heart of its responsible investment strategy. Any pension fund should welcome engaged and committed members and we agree with campaigners on the threat posed by climate change now and in the future.

“However, the fund does not agree that an exclusive focus on fossil fuels is a reliable measure of an investor’s carbon exposure – or a particularly helpful one in building a low carbon economy. For example, some of the greatest investment in renewable energy worldwide is connected to firms also working in fossil fuels; while other extremely carbon intensive industries are ignored.

“Realistically, many active, responsible investors like SPF are already progressively ‘de-carbonising’ by shifting investment to renewable energy and by working together to demand better standards from industry. However, simple divestment is unlikely to address climate change; as all evidence suggests it gives greater control to investors with absolutely no commitment or interest in reducing carbon.”

Picture courtesy of Unison Scotland

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