A year after Oxford University decided to divest from fossil fuels, the Oxfordshire local government pension fund has begun excluding fossil fuel investments from their own fund.
On 10th September, the administering committee for the scheme, worth approximately £3 billion and with around 65,000 members, voted to move the full value of the Fund’s passive equity investment, worth £530Mn, into a newly launched ‘Paris Aligned Benchmark’ fund. The move will effectively exclude all investments in coal, oil and gas companies.
Over the past year, the Fund as a whole achieved a 17.7% reduction in emissions across its measurable investments, and also decreased its exposure to fossil fuel reserves by over 30%.
Councillor Jo Robb, Green Party Councillor and member of Oxfordshire Pension Fund Committee, said:
“The Committee’s decision to invest in a fund that excludes fossil fuels and rapidly reduces emissions is critical. In the light of recent extreme weather events, the dire warnings of the most recent IPCC report, and the upcoming COP26 summit in Glasgow, local councils across the UK must show the leadership the situation demands. I hope this commitment will be one of many in the months to come.”
The move to exclude fossil fuel investments comes in a pivotal month for divestment campaigners in the UK and around the world. Last week, after a decade of campaign pressure, Harvard University announced plans to divest its $42 Billion endowment fund, while Strathclyde Pension Fund, one of the largest LGPS funds in the UK are currently under intense scrutiny to deliver on their pledge to divest their fund before Glasgow hosts COP26 later in the year.
Nearly £10bn worth of investments in fossil fuels, including oil and gas companies such as BP and Shell, were found in local government pension funds in the last financial year, according to an assessment by campaign groups Platform and Friends of the Earth earlier this year, despite over 75% of councils having declared a climate emergency.
Robert Noyes, an energy economist at Platform and a coordinator of UK Divest, the network supporting local government divestment campaigns, said:
“In the run-up to COP26, councils across the UK have an important decision to make. To hope beyond hope that engaging with fossil fuel companies – who denied the climate crisis for decades, and spent just 1% of their annual capital expenditure on clean energy in 2020 – will magically work this time, or join the $14.5 Tn coalition of climate leaders in ending fossil fuel investment.”
Though some UK councils have moved to divest their pension fund, most have not done so, a view shared by the UK Government. Last week, Teresa Clay, head of local government pensions, told delegates at the LGC Investment & Pensions conference that “engagement is the right way, not divestment.”
But with COP26 focusing minds, such a view is increasingly out of step with public opinion. Polling with YouGov earlier in the year found just 12% of the UK public were in favour of fossil fuel investments from pension funds, while polling from NEST in 2020 found that 65% of pension savers believed their pension should be invested in a way that reduced the impact of climate change.
Al Chisholm, from local campaign group Fossil Free Oxfordshire, added:
“The decision to exclude holdings in coal, oil and gas companies from passive investments is extremely welcome and sits well alongside the important work being done to decarbonise the whole fund. We see this as a critical step on the path to investing for a safer climate and more just world and congratulate the Committee for taking this decisive and forward-looking move.”
ENDS
For more information, please contact Robert Noyes at robert@platformlondon.org or at 07940344072.