Campaigners make case for ditching fossil fuel investments

CAMPAIGNERS MAKE CASE FOR DITCHING OIL, COAL & GAS INVESTMENTS AT  EAST SUSSEX PENSION FUND EVENT
Relying on “engagement” with fossil fuel companies a massive gamble, event told

Tuesday 13 June, County Hall, Lewes: Divest East Sussex made a 20-minute presentation, making the case for the East Sussex Pension Fund to ditch its investments in the oil, coal and gas industries, at a training day for the East Sussex Pension Committee at County Hall in Lewes today (13 June).

Making the presentation on behalf of Divest East Sussex, Rachel Crossley – a former World Bank employee with 25 years experience in international development, sustainable finance and asset management [2] – outlined the substantial financial risks posed to the Pension Fund by its continued investment in fossil fuels (oil, coal and gas). She also explained why the Fund’s current policy of “engagement” (ie. lobbying fossil fuel companies to change their practices) cannot address these risks. Getting rid of such investments (divestment) was the “responsible and prudent” thing to do, she argued, noting that hundreds of other institutions across the globe – including two local pension funds here in the UK – have already taken such action.

The training was also attended by members of the Pension Committee and Local Pension Board, Council staff, and employees of Legal & General Investment Management and the Local Authority Pension Fund Forum.

The East Sussex Pension Fund – which is administered by the County Council and holds the pensions for a wide range of organisations from across East Sussex – is estimated to have at least £183m invested in the fossil fuels [3]. Three members of the Fund – Hastings Borough Council, Lewes Town Council and Brighton and Hove City Council – have already passed motions calling on the Fund to divest from fossil fuels [4].

Investments in fossil fuels have become increasingly controversial, with over 685 institutions in 76 countries,  managing assets worth  more than $5 trillion, making some form of divestment commitment since 2012 [5].

Gabriel Carlyle, who also attended the training on behalf of Divest East Sussex, said: “The UK Government accepts that roughly 75% of known fossil fuel reserves are going to have be left unused if we’re to have any chance of averting catastrophic climate change [6]. This means that fossil fuel companies are eventually going to have to write-off trillions of dollars worth of their assets [7], and that by investing in oil, coal and gas, the East Sussex Pension Committee is exposing local people’s pensions to a huge financial risk. By retaining these investments – and relying on “engagement” to try to radically change these companies’ business models – the Pension Committee is taking a massive gamble. The responsible and prudent thing to do is to follow other local pension schemes, like Waltham Forest and Southwark [8], and set a five-year timeline for ditching these damaging and risky investments.”

NOTES
[1] Divest East Sussex is a coalition of East Sussex organisations calling for the divestment of the East Sussex Pension Fund from Fossil Fuels. Members include Fossil Free Hastings (https://fossilfreehastings.wordpress.com), Climate Forest Row and Keep It In the Ground Lewes.
[2] https://uk.linkedin.com/in/rachel-crossley-30284514
[3] Based on figures provided by East Sussex County Council in response to a Freedom of Information Act request, analysis by the NGO Platform London estimates that, in addition to £6m of direct investments in oil, coal and gas companies, the East Sussex Pension Fund also currently (ie. as at 30 April 2017) has an estimated £177m invested indirectly in these companies via so-called “pooled funds”.
[4] ‘Campaigners’ joy as Hastings council agrees fossil fuel divestment’, 14 April 2016, Hastings Observer, http://www.hastingsobserver.co.uk/news/local/campaigners-joy-as-hastings-council-agrees-fossil-fuel-divestment-1-7328414. ‘Lewes Town Council calls for East Sussex Pension Fund to ditch its investments in oil, coal and gas’, 7 March 2017, https://fossilfreehastings.wordpress.com/2017/03/07/lewes-town-council-calls-for-east-sussex-pension-fund-to-ditch-its-investments-in-oil-coal-and-gas. ‘Brighton Council calls for East Sussex Pension Fund to ditch fossil fuels’, 6 April 2017, https://fossilfreehastings.wordpress.com/2017/04/06/brighton-council-calls-for-east-sussex-pension-fund-to-ditch-fossil-fuels.
[5] https://350.org/big-divestment-news/
[6] https://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2016-12-09/56871
[7] See for example: http://blogs.worldbank.org/climatechange/carbon-bubbles-stranded-assets
[8] Worth £735 million, the London Borough of Waltham Forest pension fund has agreed to divest itself of its £23.9 million worth of investments in the oil, coal and gas industries. See ‘WIN: First UK pension fund divests from fossil fuels’, 23 September 2016, http://gofossilfree.org/uk/win-first-uk-pension-fund-divests-from-fossil-fuels/. In December 2016 the £1.2bn Southwark Pension Fund also committed itself to divesting from fossil fuels: https://gofossilfree.org/uk/press-release/southwark

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