The East Sussex Pension Fund – which holds the pensions for a wide range of organisations from across East Sussex – currently has an estimated £172m invested in the fossil fuel industries1 (oil, coal and gas). These investments are damaging the balance of our climate and pose a serious risk to local people’s pensions (see below).
On the 18 July 2016 the East Sussex Pension Committee – the body that has authority for all pension-related investment decisions – will be holding the Fund’s annual investment strategy meeting at County Hall in Lewes.
Please write to one or more of the five County Councillors who sit on the Committee, before the 18th July, and urge them to support the divestment of the East Pension Fund from these irresponsible and financially risky investments (see below for more information and suggestions for points that you might like to make when you write):
Councillor Richard Stogdon (Conservative, Committee Chairman)
Laurel Tree Farm, Boars Head
Councillor Frank Carstairs (UKIP)
1 Corsica Road
Councillor Michael Wincott (Labour)
375 Harold Road
[NB Michael Wincott – who is a Hastings Borough Councillor as well as an East Sussex County Councillor, and who now sits on the Pension Committee – recently voted for a motion calling on East Sussex County Council to divest from fossil fuels – see (3) below for more information.]
Councillor Bob Standley (Conservative)
Councillor David Tutt (Liberal Democrat)
78 Ringwood Road
Hand-written letters sent through the post are the gold standard, but if you only have time to send an email then that it is still extremely valuable.
SOME POINTS YOU MIGHT LIKE TO RAISE:
1) Scientists have estimated that at least half of the world’s proven fossil fuel reserves will have to remain unburnt if we are to have a 50% or better chance of keeping global warming to less than two degrees Celsius2 – a dangerous threshold that world leaders at the 2009 Climate Summit recognised should not be crossed.3 This is why over 500 institutions, representing over $3 trillion in assets, have already committed to divest from fossil fuel companies, including: the cities of Oslo, Seattle, San Francisco and Oxford; Glasgow University; the World Council of Churches, and the British Medical Association.4
In a statement earlier this year, announcing its decision to divest, the Rockefeller Family Fund noted that:
“While the global community works to eliminate the use of fossil fuels, it makes little sense—financially or ethically—to continue holding investments in these companies. There is no sane rationale for companies to continue to explore for new sources of hydrocarbons. The science and intent enunciated by the Paris agreement cannot be more clear: far from finding additional sources of fossil fuels, we must keep most of the already discovered reserves in the ground if there is any hope for human and natural ecosystems to survive and thrive in the decades ahead.”
2) Climate change poses significant financial risks which are likely to affect the thousands of beneficiaries of the East Sussex Pension Fund, which provides retirement benefits for County Council employees, employees of Brighton & Hove City Council, the five borough and district councils, and a number of universities, colleges and schools.
Indeed, last September the Governor of the Bank of England, Mark Carney, warned that investors face ‘potentially huge’ losses from climate change action that could make vast reserves of oil, coal and gas ‘literally unburnable’, noting that: ‘The challenges currently posed by climate change pale in significance compared with what might come … Once climate change becomes a defining issue for financial stability, it may already be too late.’ (‘Mark Carney warns investors face ‘huge’ climate change losses’, Financial Times, 29 September 2015).
Likewise, HSBC has warned that 40-60% of the market capitalisation of oil and gas companies is at risk from a so-called ‘carbon bubble’.
Given these risks to investments in fossil fuel companies, the responsible and prudent thing to do is to act now to protect the financial future of pension fund members by divesting from fossil fuels.
If you’re writing to the Conservative Councillors on the Pension Committee (Richard Stogdon and Bob Standley) then you might want to cite one or more of the following quotes6 from the debate on the motion:
‘It is difficult to argue with the following quote from Desmond Tutu: “It makes no sense to invest in companies that undermine our future” … any money invested in any scheme isn’t ours, it’s taxpayers’ money, and because of this any funds from any governmental level should always, before anything else, be used in a responsible way.”‘ – Liam Atkins, Conservative Group leader on Hastings Borough Council
‘It seems to me to make perfect common sense. This is like a statement of intent from the council, that we take this sort of thing very seriously …’ – Councillor Rob Lee, Conservative Councillor for Maze Hill
Michael Wincott – who is a Hastings Borough Councillor as well as an East Sussex County Councillor and who recently joined the Pension Committee – was one of the HBC Councillors who voted for this motion.7 If you’re writing to him then please congratulate him for doing this and ask him what steps he’s taking, now that he’s joined the Pension Committee, to divest the Fund from fossil fuels.
4) While the Fund’s current position is that ‘At this point in time … active engagment with investee companies is the preferred option to bring about change’8, such engagement has no chance of success when it requires companies to change their core business models (in this case, finding fossil fuels, extracting them from the ground and selling them to be burnt). Nor does ‘engagement’ deal with the financial risks (the ‘carbon bubble’) outlined in point (2) above.
Indeed, decades of “engagement” with the fossil fuel companies like Shell, BP and Exxon have not succeeded in achieving any meaningful moves towards reducing emissions or changing these companies business models.
Case study 1:
In 1990, a small group of investors offered a resolution at the annual shareholder’s meeting of Exxon, asking the company to “develop a company-wide plan to reduce carbon dioxide emissions.” Exxon – a company now notorious for funding climate denial – opposed the motion on the grounds that “the facts today and the projection of future effects are very unclear.” Since then, Bill McKibben notes, ‘we’ve had all 25 of the hottest years ever measured on our planet … lost half of Arctic sea ice’ and ‘the ocean has become markedly more acidic‘. Yet today, Exxon still spends $27m a year delaying and obstructing climate legislation.9 The East Sussex Pension Fund has £4.3m invested in Exxon.
Case study 2:
As mentioned above, scientists have estimated that at least half of the world’s proven fossil fuel reserves will have to remain unburnt if we are to have a 50% or better chance of keeping global warming to less than two degrees Celsius10 – a dangerous threshold that world leaders at the 2009 Climate Summit recognised should not be crossed.11 Despite this, in 2012 the 200 largest listed fossil fuel (oil, coal & gas) companies spent $674 billion on developing new reserves. In 2015, Chevron emphatically rejected a shareholder resolution to reallocate capital from exploration for new resources to higher dividends. The East Sussex Pension Fund has £3.9m invested in Chevron.
For more information the limitations of engagement see this briefing by Fossil Free Strathclyde.
1 ‘REVEALED: UK Councils have £14 billion invested in fossil fuels’, Fossil Free UK, 24 September 2015, http://gofossilfree.org/uk/revealed-uk-councils-have-14-billion-invested-in-fossil-fuels/. The £172m figure is based on data collected through Freedom of Information Requests (FOIs) to administering authorities for the 2013/14 financial year. It includes direct equity holdings in the top 200 fossil fuel companies as well as estimated fossil fuel investments in pooled equity funds.
2 Figure based on M. Allen et al., ‘Warming Caused by Cumulative Carbon Emissions Towards the Trillionth Tonne’, Nature, 2009, http://bitly.com/allen-2009; World Energy Outlook 2012, International Energy Agency. Cited in Mike Berners-Lee & Duncan Clark, The Burning Question (Profile, 2013), p. 32.
3 In the non-binding ‘Copenhagen Accord’ issued at the end of the 2009 UN Climate Summit (COP19), ‘The Heads of State, Heads of Government, Ministers, and other heads of delegation present’ noted that ‘To achieve the ultimate objective of the Convention to stabilize greenhouse gas concentration in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system, we shall, recognizing the scientific view that the increase in global temperature should be below 2 degrees Celsius … enhance our long-term cooperative action to combat climate change.’ (http://unfccc.int/resource/docs/2009/cop15/eng/l07.pdf).
5 For the text of the motion see http://hastings.moderngov.co.uk/documents/g1649/Printed%20minutes%2013th-Apr-2016%2018.00%20Full%20Council.pdf?T=1
6 Quotes taken from audio recording of the debate made by Fossil Free Hastings, 13 April 2016.
8 Email from Pension Committee Chair, Richard Stogdon, to Fossil Free Hastings, 11 May 2016.
10 Figure based on M. Allen et al., ‘Warming Caused by Cumulative Carbon Emissions Towards the Trillionth Tonne’, Nature, 2009, http://bitly.com/allen-2009; World Energy Outlook 2012, International Energy Agency. Cited in Mike Berners-Lee & Duncan Clark, The Burning Question (Profile, 2013), p. 32.
11 In the non-binding ‘Copenhagen Accord’ issued at the end of the 2009 UN Climate Summit (COP19), ‘The Heads of State, Heads of Government, Ministers, and other heads of delegation present’ noted that ‘To achieve the ultimate objective of the Convention to stabilize greenhouse gas concentration in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system, we shall, recognizing the scientific view that the increase in global temperature should be below 2 degrees Celsius … enhance our long-term cooperative action to combat climate change.’ (http://unfccc.int/resource/docs/2009/cop15/eng/l07.pdf).