North East Scotland Pension Fund invests over £124million in fossil fuel polluters
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A new report has revealed that Aberdeen City Council’s own pension fund has £124 million invested in climate-polluting fossil fuel companies.
This is despite the council pledging to be an “exemplar for net zero and climate resilience” in its climate routemap and agreeing a plan in May 2020 to position Aberdeen as a “climate positive city”.
The North East Scotland Pension Fund administers the pensions of 71,000 members, including for employees of Aberdeen, Moray and Aberdeenshire Councils.
Moray Council declared a climate and ecological emergency in June 2019 and which plans to reach net zero carbon emissions by 2030.
The report by Friends of the Earth Scotland, Platform and Friends of the Earth England, Wales and Northern Ireland found that overall in Scotland, £1.2 billion was invested in fossil fuel companies by council pension funds.
None of the 20 Scottish councils that have declared a climate emergency have taken action to end their investments in the coal, oil and gas firms chiefly responsible for driving this crisis.
The North East Scotland Pension Fund invests £17.3 million in oil major Shell.
The company is a co-owner along with Exxon of the Mossmorran plants in Fife, Scotland’s third largest climate polluter.
The Scottish Government is currently considering launching a public inquiry after 5,000 complaints were submitted about the flaring, air and noise pollution from the site.
As fossil fuel company stocks have fallen in value in recent years, local councils have lost out.
£194million of value was wiped off the oil and gas investments of the Scottish council pensions between 2017-20 with the North East Scotland pension fund losing £15.7 million and Strathclyde Pension Fund losing £46 million.
Extinction Rebellion Forres' Rachel Winter said: “I am horrified that the pensions of local authority workers are still being invested in the fossil fuel industry, which poses a direct threat to their future well-being and that of their children.
“Like Aberdeen City Council, The Moray Council has recognised the severe consequences that global heating of above 1.5°C will have on our local area such as coastal flooding, extreme weather events, wildfires, disruption to our food supplies and greater risk of future pandemics.
"Yet they are still investing the pensions of council workers in fossil fuel companies, key drivers of the climate crisis.
“With COP26 coming to Scotland, the North East Scotland Pension Fund has a vital opportunity to divest from fossil fuels and reinvest in a Just Transition to renewable energy which can help avoid the worst effects of the climate crisis and provide secure and innovative jobs for those currently working in North Sea oil.
“United Nations scientists say we must reduce our total emissions by seven per cent every year until 2030 in order to cut our emissions in half. If we are to achieve this, investing in further oil field exploration and extraction needs to stop immediately.
“Investing in fossil fuels isn’t just bad for the planet, it is also a terrible investment, as this report highlights. Since 2017, billions have been knocked off the value of local authority pension fund investments in the fossil fuel industry.
"Are council workers aware of this?
“I sincerely urge The Moray Council to insist that its pension fund managers immediately divest from this polluting industry and instead channel the local wealth held in its workers’ pensions into investment opportunities that can bring a healthy return and support Moray to build back better from the current pandemic, rather than endangering our future well-being.
“Banking on an industry that is in terminal decline is unethical and a dreadful investment of our council workers’ hard-earned money: money that should be being invested in socially and environmentally beneficial local projects to create new jobs in the renewable energy sector or in retro-fitting our housing stock, for example.
Strathclyde Pension Fund was the worst offender in Scotland after being found to have £508 million invested in companies such as Shell, BP and Exxon. This is despite Glasgow hosting the UN climate conference later this year and Councillors in the city declaring a climate emergency in May 2019.
Across the UK, total fossil fuel investments in the pension funds stood at £9.9 billion - an average of £1,450 per scheme member.
Over half of Scotland’s universities have committed to divest from fossil fuel companies, including Edinburgh, Stirling and Dundee Universities, alongside local government funds in Southwark, Islington, Lambeth, Waltham Forest, and Cardiff.
Deputy convenor of UNISON Scotland Stephen Smellie said: “It is disappointing that the people who manage the pension funds of local government workers are oblivious to the climate crisis that is facing us.
"Workers care deeply about a sustainable future for their children, and if pension funds consulted with the people whose money they are investing they would know that.
"Instead, they continue to be part of the climate crisis problem rather than being part of the solution that they could be if they increased investments in sustainable alternatives.
“The value of the fossil fuel investments is high but only a small percentage of the funds’ overall investments so there is no financial justification for maintaining investments in coal, fracking or further fossil fuel exploitation.”
“There is a moral and ethical case for divesting from polluting fossil fuels, but there is also a firm financial case to remove workers’ pension funds from investments that will lose value as the world moves to a low-carbon economy which is less dependent on fossil fuels.”
In September 2020, environmental groups strongly criticised Aberdeen City Council’s decision to seek advice from oil giant BP on cutting the city’s greenhouse gas emissions.
UK-based BP is one of the world’s biggest fossil fuel producers and the company is continuing to explore for new oil and gas, including in Scottish waters.
BP is also a financial backer of the proposed gas export scheme in Mozambique which has been associated with forced displacement and militarisation.