Sunday 16 December 2018

Will Brent Council follow Lambeth in fossil fuel divestment?

Cross-party and non-party campaigners for disinvestment
The Fossil Free Brent campaign will hopefully get a boost from the decision of Lambeth Council to end its pension fund investments in fossil fuel companies. Disinvestment makes sense not just in terms of fighting climate change but also in moving out of shares that will inevitably decline long-term as the climate crisis intensifies and there is a move to alternative energy production.

Brent Labour included disinvestment in its election manifesto and the council is believed to be looking at ways to implement the policy. Implementation is quite complex as investments need to be identified, often inside larger management funds, and Brent's has substantial funds invested via  the London-wide Collective Investment Vehicle, where control involves many boroughs.  Brent Council will need to join other boroughs, such as Lambeth,  in changing CIV investment policy.


In Lambeth Labour’s 2018 manifesto we pledged to work towards divesting from fossil fuels, and invest our pension fund in a socially and financially responsible way. This was particularly thanks the tireless campaigning of my fellow Labour councillors and lobbying from local groups such as the Advocacy Academy.

Today, just a few months after we made that manifesto promise, we have clearly set out how we will implement it.

Firstly, pensions committee has unanimously agreed to sell over £200m of global equities investments and reinvest the money in a low carbon alternative. Several suitable alternatives have been identified – council officers have been asked to research them in more detail and a final decision as to where the money will be reinvested will be made at the next pensions committee meeting.

Secondly, pensions committee has unanimously agreed in principle to sell down its remaining global equities investments and reinvest the proceeds as soon as a suitable alternative becomes available within the London Pension Collective Investment Vehicle framework (the collective pensions body for London councils). Several suitable alternatives have been identified, and we will lobby the London CIV to include them or similar funds within its framework.

Finally, pensions committee has unanimously agreed in principle to sell down its remaining equity investments (these are in emerging markets), and reinvest the proceeds as soon as a suitable alternative becomes available within the London CIV framework. A suitable alternative has been identified, and we will lobby the London CIV to include it or a similar fund within its framework.

We believe this is the first time any UK local government pension fund has set out a clear roadmap, within its existing actuarial framework, that will allow it to fully divest all its shares and reinvest in low carbon alternatives. Crucially we are able to do this while fully protecting Lambeth council pensioners, current and future.

Lambeth is leading the way on the divestment agenda, with a clear plan to achieve our manifesto promise. Many pension funds now have policy in favour of divesting from carbon intensive fossil fuel shares, but we believe we are the first to set out exactly how we will do this. We will now focus on lobbying the London CIV to include at the earliest opportunity the funds that will allow us to complete our divestment process.

When it comes to action on climate change Lambeth walks the walk, we don’t just talk the talk. This is what happens when Labour is delivering in power rather than shouting on the sidelines like our opponents. I’m grateful to my fellow committee members and councillors who have lobbied on this issue for helping to make this a reality.

Councillor Iain Simpson, Chair of Lambeth Pensions Committee
-->The Divest Brent campaign has a Facebook site HERE and urge the public to support their petition HERE.

This is the text of the petition to Brent Council:
Brent Council should divest its pension fund from fossil fuel companies to protect the people of Brent. So we ask Brent Council to make a public divestment statement committing the Brent Pension Fund to:
1.  Immediately freeze any new investment in the top 200 publicly-traded fossil fuel companies with largest known carbon reserves (oil, coal and gas)
2.  Divest from direct ownership and any commingled funds that include fossil fuel public equities and corporate bonds in the top 200 list and shift these funds to lower risk, ethical investments before the May 2022 Council elections
3.  Advocate to other pension funds, including the London Pension Fund Authority and Local Government Pension Scheme members to do the same
4.  To do the above in a timely manner - by setting up a working group to report back on a strategy to bring about divestment within three months from the submission of this petition

Why is this important?

We believe divestment from fossil fuels to be not only ethically and environmentally correct, but also financially prudent.
Climate change is the greatest challenge humanity has encountered. The 20 hottest years on record have all occurred since 1981 and 2016 was the hottest ever . Higher average temperatures are directly linked to extreme weather events such as heat waves, droughts, floods and storms.
Scientists have unanimously concluded that these changes are a consequence of human activity, arising from the burning of fossil fuels. Moreover, this activity has resulted in unprecedented levels of air pollution, now regarded as a major world killer.
In a speech at Lloyd’s of London in September 2015, Mark Carney, Governor of the Bank of England said that by the time ‘climate change becomes a defining issue for financial stability, it may already be too late’. Carney warned investors that policies to address climate change ‘would render the vast majority of reserves ‘stranded’ – oil, gas and coal that will be literally unburnable’ .
In order to continue developing fossil fuel reserves – particularly in the difficult areas where the remaining reserves are located (including the Arctic, the mouth of the Amazon and tar sands in sensitive areas) the developing companies need investment – divestment is a way of cutting off the funds needed to carry out these damaging activities. It also sends a powerful signal to the companies and others that it is time to move away from fossil fuels towards renewable energy.

No comments: