A new report out today from UK Divest (Friends of the Earth & Platform) has found that West Midlands Pension Fund have the third highest exposure to fossil fuels of any local government pension scheme in the UK, investing £508 million in the top 200 most polluting fossil fuel companies in the 2019/2020 financial year.
The pension fund should be divested from polluting fossil fuel companies and reinvested in the region to create local green jobs. For example, Jaguar Land Rover, which has just announced it will phase out diesel engines, has a huge engine factory in Wolverhampton. Jobs like these need to transitioned to the clean economy, and the pension fund can help to fund this opportunity.
The report is covered by the national press Times, Express and Guardian.
DivestWMPF have been campaigning since 2015 for the pension fund to divest from fossil fuel companies because fossil fuels are the main driver of climate change and incompatible with keeping a safe and habitable planet for retirement and future generations. They are also risky assets to hold now that the world is moving rapidly towards low carbon technologies to provide energy for the future. Despite engagement with the fossil fuel companies by WMPF and other local government pension funds, the report highlights the lack of successes to show for this effort. For example, one company often highlighted as an engagement success, BP, has a long way to go – from the report:
“BP, the second largest beneficiary of direct investments from local authority pensions, caused Deepwater Horizon, the world’s largest ever oil spill in 2010. Despite advertising themselves as a ‘green’ energy company, BP plans to spend £41 billion on new oil exploration in the next decade, including projects in the Canadian ‘tar sands’, the Arctic National Wildlife Reserve and the Amazon rainforest (Corporate Watch, 2020)”
Over three quarters of UK councils have declared a climate emergency, this includes the West Midlands Combined Authority, Birmingham City Council, Wolverhampton Council and others. Continuing to invest in companies which are planning expansion of fossil fuel extraction completely undermines these local authorities’ efforts to decarbonise.
The report also make it clear that fossil fuels are a risky investment:
It’s a financial risk—with UK Public Pensions losing £2 billion on oil investments in the last 4 years. 5 It’s also a political risk—with the UK public more concerned about climate change than ever before.
The report points to research by Platform that WMPF recently lost £80 million on fossil fuels:
There has never been a better time to divest from fossil fuels.
After a decade of austerity and the devastating economic impact of Covid across the UK, local councils can use their pension funds to support local investment priorities. Some already do, and in 2021, it’s time for others to follow their lead.
If you live in Wolverhampton, please contact your local councillor and tell them to pledge to support fossil fuel divestment.
UK Divest have a new website where you can find out more about divestment and get involved in your area.