March 24th: Street Theatre outside Brent Civic Centre as climate activists take on oil companies in tug of war over fossil fuel investments. Which side will YOU be on?

From Divest Brent

 

Roll up, roll up for the Brent Pension Fund Tug of War! Theatre, magic and music! From 4.15 to 5.30 pm, outside the Wembley Library entrance to the Civic Centre (near Sainsbury's) Friday 24th March.

 

Divest Brent is organising a street theatre 'tug-of-war' - with Brent Pension Fund being pulled between the big oil companies, who are anxious to keep their place in the Pension Fund’s portfolio, and those of us who believe that in the climate emergency the Pension Fund should not be financing climate break-down. The street theatre show, with colourful props, comedy, magic and song, will take 10 minutes and will be repeated from time to time until 5.30.

 

Organiser Simon Erskine said: 

 

More than 30 groups across Britain are expected to join the 'Divest from Crisis' day of action on Friday 24 March. Brent will join local demonstrations taking place across the UK, urging councils, pension funds, and financial institutions to take action to address the crises of fuel poverty, climate breakdown, and energy security by divesting from fossil fuels. Despite declaring a climate and ecological emergency in 2019 Brent is still estimated to have nearly £26 million* invested in planet-wrecking fossil fuels through its local government pension fund.

*SEE LINK 

In July 2019 Brent Council declared a climate and ecological emergency and committed to do all in its gift to strive for carbon neutrality by 2030.This declaration did not extend to Brent’s billion-pound Pension Fund because the Fund looks after the pensions of Council staff and support staff in schools. The Fund has, however, made some progress with investment into a low-carbon fund (albeit representing only 3% of the Fund) and a Net Zero Roadmap charting a course which should eventually lead to divestment. But global warming is indeed a climate emergency and we do not have time for the Roadmap to run its course. The Roadmap should not get in the way of a rapid divestment from the fossil fuels which are so much to blame for the emergency.

 

More information HERE:

Brent Pension Fund loses £8m from failure to divest from fossil fuels - but others fare worse and the Council is making progress

 

Simon Erskine campaigning outside City Hall

Divest Brent, the campaign calling on the Council to sell their holdings in fossil fuel companies like Shell, BP and ExxonMobil, received a boost after submitting a Freedom of Information request to the Council. In responding to this request the Council admitted that over the last year the Pension Fund was worth £8 million less as a result of not having divested the Fund from fossil fuel investments before the Covid pandemic. The Council is actually doing significantly better than many authorities – over the last 4 years local authority pension funds have lost £2 billion of value in fossil fuel stocks. 

 

Up until now the leading argument against divestment had been the consistently high returns from these investments. Divest Brent Co-ordinator, Simon Erskine, said that historically it was true that fossil fuel companies had been a key part of any pension fund – and indeed any investment portfolio – due to the high level of returns:

 

The world has moved on and now not only do many people think that it is inappropriate to lend support, through investment, to fossil fuel companies but the entire economic situation has changed, with plunging share values. If we are to meet the net zero by 2050 target (i.e. reduce carbon emissions by 2050 so that they are no more than the amount absorbed by planting trees and other means) we have to make dramatic reductions in the amount of fossil fuels that we burn – and ultimately stop burning them altogether. 

 

If governments fail in their duty to bring about those cuts through legislation then fossil fuel companies are also facing a world where electric vehicles are rapidly catching up with, and set to overtake, petrol and diesel vehicles; and where renewable and nuclear energy are rapidly taking over from fossil fuels as the main generators of electricity.

 

In the meantime Divest Brent has been increasing its support base through its petition, which now boasts nearly 1,400 signatories – including well over 1,100 Brent residents. 

 

Simon Erskine praised the action taken by the Council to date:

 

Not only has the Council changed its investment policy by recognising the risks of fossil fuel investments but it has also made a specifically low carbon investment as part of its Stock Market holdings – as well as making investments in renewable energy as part of its loan-stock holdings. We warmly welcome these developments – but the low carbon investment represents only 3% of the Pension Fund’s total investments. 

 

The Council has suggested that more money could be invested in the low carbon fund but there is no commitment to do so, despite it having committed to divest as part of its resolution last year to declare a climate and ecological emergency. It is not only Divest Brent that is looking for the Council to divest – more than half of the Councillors want the same thing.

 

Divest Brent is working with sympathetic councillors and is hopeful that, with the Council currently consulting on its ambitious Climate Emergency Strategy, divestment will be seen as a key part of that strategy.

 

Brent moves forward on reviewing pension fund investments in the light of the Climate Emergency

World Economic Foundation - Top 5 global risks in terms of likelihood

Brent Scrutiny Committee made common purpose with local pressure group Brent Divest on the case for ending investment in fossil fuels and investment in renewable energy  and low carbon funds at this week's meeting.

The situation is complicated by the fact that Brent's Pension Fund investments are now largely made through the London Collective Investment Vehicle (CIV). Change will come through action by the various local authorities represented on the CIV but there are positive signs that  things are moving with the launch of a low carbon industries fund expected within the next six months. 

There are issues about whether decisions can be made on purely ethical grounds but the financial case is now clearer with both Mark Carney at the Bank of England and Schroders warning of the poor prospects of fossil fuel investments.

The overall responsibility to ensure the best return on investments has to be balanced by the risks attached to such investments and there has been considerable change over the last few years as the WEF chart shows.   The Committee ended with a recommendation that the Pension Fund Committee would do all it could around divestment and investment in low carbon funds without detriment to the financial position of the fund.

Before the meeting Simon Erskine of Brent Divest, writing to all committee members commented:

1.       To put the discussion in context, I think it is fair to say that, although the paper refers in its title to the responsible investment policy generally, in fact it is largely about the climate emergency. By this I mean that 4 of the 8 sections of the paper under the sub-title Responsible investment (paras. 3.6 to 3.13) feature climate change, carbon footprint and renewable energy. The paper is therefore talking largely about the question of investing in fossil fuels.

2.       I think it is a moot point whether this is a discussion about ethics as suggested in the Chair’s introduction to the paper in his report. Greta Thunberg has said, in relation to the climate emergency, that “our house is on fire” – and recently that has been proved to be literally true through vast areas of Australia, which follow other exceptional wildfires throughout the world, such as in California, Canada, Siberia – and even in the UK (on Saddleworth Moor). Is it an ethical question whether or not to get out the extinguisher if your house is on fire?

3.       It is not simply a case of deciding if Brent Pension Fund can afford to dispose of its fossil fuel investments. Para. 3.11 of the paper makes it clear that “Climate change has the potential to impact all asset classes over the Fund’s lifetime” and many commentators have made clear that these investments are becoming increasingly risky – not least former Bank of England governor Mark Carney. The United Nations Principles of Responsible Investment recently carried out a study (https://www.unpri.org/inevitable-policy-response/forecast-policy-scenario-equity-markets-impacts/5191.article) suggesting that, for example, oil and gas stocks could lose nearly a third of their value by 2025. Para. 3.11 of the Responsible Investment paper also points out that the Council, with its advisers, is modelling various scenarios (e.g. “business as usual” compared to robust action taken internationally to counter the climate emergency). This should help clarify the risks involved – but there seems to be no evidence at all that fossil fuel investments should be retained for financial reasons – quite the contrary.

4.       Para. 3.13 of the paper comments on a £50m investment in an infrastructure fund which will include 25% renewable energy. This is warmly to be welcomed but the priority has to be to reverse the growth in CO2 emissions and an important element of this is reducing the supply of fossil fuels. 

5.       A short-term problem is that most of the Pension Fund is now invested in the London Boroughs’ investment pool, the London Collective Investment Vehicle (LCIV), which currently has no fossil free equity funds. Recently, however, I met with the Chief Executive of LCIV who said that they were launching their first fossil free fund by the end of March and that they were aware of the need to provide a range of funds for the benefit of the increasing number of London Boroughs which have committed to divest – and indeed more than half the London Boroughs have expressed an interest in fossil free funds. There is accordingly no reason why the Council should not commit to divest when suitable alternative investments are available.

6.       One point that is not mentioned in the paper is the fact that the 2018 Brent Labour manifesto committed to divest the Pension Fund and this was reiterated in the Council’s climate and ecological emergency declaration last July.

7.       I therefore very much hope that the Committee will welcome the report on the Pension Fund’s Responsible Investment Policy and encourage the Pension Fund Sub-committee to move forward, after completing its current due diligence work as described in paras. 3.11 and 3.12 of the report,  with divesting the Fund at the earliest possible opportunity in accordance with the manifesto commitment and climate and ecological emergency declaration.