Dear Strathclyde Pension Fund Committee members...
We have written a letter to the SPF Committee, expressing our disappointment with their current lack of action on divestment, despite last September voting on a paper which stated “Once the proposal is fully developed its implementation will lead to fossil fuel divestment”.
This letter has been signed by the following groups and individuals:
Ross Greer, MSP
Lana Reid-McConnell, Chair of the Net Zero and Climate Progress Monitoring Committee
Stephen Smellie, Depute Convenor UNISON Scotland
Peter Henderson, Councillor
Stephen Curran, Councillor
Jon Molyneux, Councillor, Glasgow Greens co-leader
Chris Nicholson, GMB for a Green New Deal
Ric Lander, Friends of the Earth Scotland
Time for Change Argyll and Bute
Extinction Rebellion Glasgow
And was delivered to the Committee this morning ahead of today’s meeting.
Dear Strathclyde Pension Fund Committee Members,
We the undersigned groups and individuals are writing because we are extremely concerned about the Strathclyde Pension Fund’s continued investment in some of the world’s biggest fossil fuel polluters, including BP, Shell and TotalEnergies, and lack of a realistic strategy to address the climate emergency. We urge you to push for a more rigorous climate strategy that will exclude fossil fuel investments as promised in the committee paper of September 2021.
In April, groups including Divest Strathclyde and Friends of the Earth Scotland warned that Strathclyde Pension Fund’s proposed ‘traffic light’ system to assess the fund’s investments in fossil fuel companies set the bar too low, used unhelpful criteria and was unlikely to help decarbonise the fund. The results of this assessment as now published in Appendix 5 of the investment update report have revealed a deeply flawed approach to assessing climate risk. Not a single fossil fuel company was rated ‘red’ and the majority were rated ‘green’. In June this year, the UN secretary general described the fossil fuel majors as having ‘humanity by the throat’.
Both BP and Shell were rated green, despite being historically two of the world’s largest contributors to climate change and having business plans that are not compatible with limiting warming to less than 2 degrees as per the Paris Agreement. Any scoring system that gives BP and Shell a free pass with no further scrutiny is clearly not fit for purpose. The arbitrarily low ‘pass mark’ of 50% and the exclusion of highly relevant criteria, including the companies’ actual carbon emissions, in the assessment essentially guarantees the green light for fossil fuel investments. It is worth noting that if the bar was set at 70%, only two of the listed companies would pass.
We note that the committee paper passed in September 2021 stated ‘Once the proposal is fully developed its implementation will lead to fossil fuel divestment’. There is wide support for divesting from fossil fuels across the Strathclyde region. This includes the motion of support from Glasgow City Council and signing of the C40 Cities declaration on divestment, motions other councils in the area including West Dunbartonshire and Renfrewshire, plus support from trade unions like Unison and from employers that use the fund, such as Glasgow School of Art.
Recent months have demonstrated the risks that fossil fuel industries pose to international peace as well as to the wellbeing of Strathclyde residents who are experiencing fuel poverty as a result of runaway gas prices. We have witnessed record breaking hot and dry weather in Scotland and the devastating ongoing floods in Pakistan, which were linked to climate change.
Although the fossil fuel majors are currently experiencing huge jumps in their profitability, it is vital to recognise that they also experienced record lows during the covid-19 pandemic. Effective investments for pension funds need to be profitable in the long term. Fossil fuel stocks are famously volatile and must decline if we are to limit global warming to 1.5 degrees. Furthermore, current fossil fuel profits come at the expense of Strathclyde residents being pushed into fuel poverty. It is important for the fund to consider environmental, social and governance angles to their investments, which should include climate change and the wellbeing of Strathclyde residents and pension holders.
It is encouraging that the committee has already accepted the viability of divestment as an approach but we need to see a much more rigorous approach for this to actually be delivered in practice. Given that it greenlights the world’s biggest polluters for continued funding, the traffic light system clearly sets the bar too low to be of any use as it currently stands. It merely reaffirms the status quo.
We have the institutional and public support for a climate change strategy that is much more effective and ambitious than the inaction that this assessment suggests. We urge you to raise your concerns about the current assessment and push for greater ambition that will actually lead to meaningful divestment from fossil fuels.