Councils invest £10b in fossil fuels

Billions of pounds of local government pension funds are still invested in fossil fuels – despite efforts to tackle the climate emergency, research suggests.

Freedom of Information requests by environmental campaigners found local authority pension funds have £9.9 billion invested in fossil fuel companies, despite decreases in recent years.

The investment in the polluting energy sources continues despite more than three quarters of local councils declaring a climate emergency, campaigners said.

Emergency

The analysis from Platform, Friends of the Earth (England, Wales, and Northern Ireland), and Friends of the Earth Scotland is based on the end of the 2019/2020 financial year.

It uses a list of the world’s 200 biggest extractors of fossil fuels to examine the direct investment in oil, coal and gas companies, and indirectly through investment funds which put pension money into the sector.

According to the analysis, which the campaign groups say is likely to be an underestimate because it only focuses on the 200 biggest companies, fossil fuels represent 3% of the Local Government Pension Scheme, with coal accounting for £3.4 billion and oil and gas making up £6.5 billion.

Almost three quarters of the investment (72%) takes place indirectly through investment funds, according to a report by the groups.

Rianna Gargiulo, divestment campaigner at Friends of the Earth, said: “Declaring a climate emergency may garner good headlines but too often it seems to stop there.

Austerity

“Councils can’t make a bold claim about saving the planet while continuing to invest in fossil fuels.

“Local authorities have the power and duty to ensure local workers not only have a pension for their retirement, but also a future worth retiring into. ”

She urged councils to invest in renewable energy and social housing, that benefit communities and households and are a better investment.

Robert Noyes, campaigner and researcher at Platform and report author, said: “After a decade of austerity and the devastating economic impact of Covid across the UK, local councils can and should be using their pension funds to support local investment priorities.

Responsible

“Instead of making risky bets on fossil fuels, let’s channel the wealth in our pensions to local communities and build a better world beyond the pandemic.”

He added: “Whatever your stake in your pension – imagine what world you want to retire into – and push your pension to invest in it.”

A Local Government Association spokesperson said: “Councils are very mindful of being socially and environmentally responsible.

“Pension scheme managers are aware of their responsibilities and comply with the relevant legislation and government guidance.”

This Author

Emily Beament is the PA environment correspondent.