Divest Strathclyde statement in response to the Glasgow City Council Climate Emergency Implementation Plan (CEIP)
- Strathclyde Pension Fund divestment campaigners have welcomed the proposal of Glasgow City Council’ CEIP to encourage pension funds in the city to divest from the fossil fuel industry
- They cautioned that Glasgow City Council must show leadership with its own pension fund, Strathclyde Pension Fund and encourage urgent action to ensure that the Council can meet its climate ambitions and contribute to a green recovery from the pandemic through its pension fund investments.
- Key proposals concerning pension fund investments include:
- To encourage pension fund investors in the city to develop a strategy for divestment from the fossil fuel industry by 2025
- To ensure pension fund investors in the city to meet long-term liabilities and their members’ ability to live in a world that is worth living in.
- To work with Strathclyde Pension Fund (SPF) to undertake a risk analysis of future climate impacts on its investment portfolio, ensuring that its current investments are able to provide short medium and long term returns.
See the report in full https://www.glasgow.gov.uk/councillorsandcommittees/viewDoc.asp?c=P62AFQDNDX2UDNZ3DN
On the 6th October 2020 the Council published its CEIP as a full response to recommendations made by a Climate Emergency Working Group, through which it has outlined exactly how the Council would reach its city wide carbon neutrality 2030 target and net zero emissions 2045 target.
Pension Fund Investment in Glasgow City
The CEIP proposes in its section on a Just and Inclusive Place to encourage pension fund investors in the city to develop a strategy for divestment from the fossil fuel industry by 2025. In a further explanation the CEIP states an ambition to ensure that pension fund investors ‘meet long-term liabilities and their members’ ability to live in a world that is worth living in’.
Louise Roberts from Divest Strathclyde, a group which campaigns for an end to fossil fuel investments of Strathclyde Pension Fund said, “We welcome Glasgow City Council’s proposal to encourage action from pension fund investors across the whole city. However, they do not make clear what form this encouragement will take, or whether 2025 indicates the timescale for publishing a divestment strategy or for removing fossil fuels from investment portfolios. Given the extent of pension fund fossil fuel investments in the city, and the Council’s 2030 carbon neutral target we would welcome the latter, and would find anything less unacceptable. The Council should provide more information on these points so that the public can make a more informed response to this proposal.
We are heartened by the Council’s clarification that fiduciary duty encompasses both the financial and wellbeing outcomes for clients. This should not be lost given that it is not articulated in the specific wording of the action point. We also wish to point out that the fossil fuel industry is not the only industry responsible for climate and ecological breakdown. As such we urge the Climate Implementation plan to go further in encouraging pension funds to divest from all corporations that implement extractivist projects.”
Strathclyde Pension Fund Investments
The CEIP also proposed to work with Strathclyde Pension Fund (SPF) to undertake a risk analysis of future climate impacts on its investment portfolio, ensuring that its current investments are able to meet short, medium and long term returns to its members.
Divest Strathclyde campaigners said, “This proposal alone fails to meet the level of ambition required to deliver a pension fund aligned with the Council’s climate targets. Strathclyde Pension Fund have already undertaken risk analysis, although there are serious issues with this analysis, such as the failure to account for ‘scope 3’ emissions in carbon exposure calculations. To ensure that Glasgow City Council can show leadership, and effectively encourage other pension funds in the city to divest, the CEIP should instead encourage Strathclyde Pension Fund actuaries to develop a strategy for divestment over a fixed period, given that the CEIP clearly supports this. To this end, we would welcome explicit wording to make clear that the CEIP proposal relating to pension funds in this city [see previous section on just and inclusive place proposal] also applies to Strathclyde Pension Fund.
Divest Strathclyde will be ramping up its pressure on the Strathclyde Pension Fund Committee to commit to divesting the Fund over the months leading up to the UN Climate negotiations next November at COP26 which will be hosted in Glasgow. The public will have an opportunity to provide feedback on the proposals laid out in the CEIP through a series of Public Conversations organised by Glasgow CIty Council.