Campaigners call on GM Pension Fund to divest from climate-wrecking fossil fuel investments

A noisy protest outside the Greater Manchester Pension Fund (GMPF) offices on Friday (19 July) called for the Pension Fund to respond to the climate emergency by divesting from fossil fuels.

The GM Pension Fund is the largest local government pension fund in the UK. According to a 2018 report, over 10% of the fund – up to £2 billion – is invested in oil, gas and mining companies like Shell and BP.

• www.rochdaleonline.co.uk/news-features/2/news-headlines/121867/greater-manchester-councils-put-31-billion-into-fracking

Scientists have been warning of the climate crisis for years. The UN’s Intergovernmental Panel on Climate Change (IPCC), the leading world body on climate change, has made it clear that immediate action is required to limit global warming.

Dr John Broderick, Tyndall Centre on Climate Change, University of Manchester said: “The carbon budgets we developed for Greater Manchester are intended to meet the Paris Agreement’s temperature objectives. To keep within this limit 80% of exploitable coal, oil and gas reserves have to remain under the ground.

“We need to tackle both the demand for fossil fuels and the supply and divesting is an effective way to do this.” 

The UK Parliament, the Labour Party and five Greater Manchester councils, including Rochdale, have declared a 'climate emergency' and the GM Combined Authority wants the region to be one of the greenest places in Europe.

Both the Governor of the Bank of England and the Pensions Minister have warned of the danger of continuing to invest in fossil fuels as Britain moves towards renewable energy.

However, the GMPF continues to invest in companies which are driving climate change. 

A growing number of local authority pension funds have already begun to sell their investments in fossil fuels, including South Yorkshire, Lambeth and Haringey.

A GMPF spokesperson said: “The Greater Manchester Pension Fund committed 2 years ago to being 100% carbon neutral by 2050 if not sooner, which is a higher standard than Government has set itself.

“We are the biggest local government investor in renewables and energy efficiency with £0.5 billion invested and leading investment opportunities for other funds. The pension fund’s holdings are a matter of public record and details are transparently published on our website along with our responsible investor policy (www.gmpf.org.uk/documents/investments/GMPFRIPolicy2019.pdf)

“The Greater Manchester Pension Fund is working hard to become carbon neutral and it has been recognised by the Environment Audit Committee as being one of the most engaged in the country in doing so. This needs to be balanced against the fund being top performing over 30 years and creating an additional £3.7 billion of value above that of the average LGPS pension fund.

“The fund has a fiduciary duty to demonstrate that its investment decisions do not threaten its financial performance, and the fact of the matter is over the last three years, we achieved over £400 million more in returns than if we had divested from equities in such companies such as BP or Centrica, formerly known as British Gas. 

“Accordingly, with such clear evidence that disinvestment rushed at this stage would cause material financial detriment to the fund, we need to find a ‘Just Transition’, which ensures we do not transfer the burden of this cost to the employers and taxpayers of Greater Manchester alike, which would result in significant council tax hikes, and importantly avoids job loses for residents across the conurbation who are employed in these industries. 

“As part of a recent review of investment strategy we are currently implementing  £2.5 billion of the fund assets being divested to a low carbon approach targeting a significant reduction in carbon footprint and intensity.

“In a meeting with Fossil Free GM last week it was recognised we share same goal of a zero-carbon economy as quickly as possible although Fossil Free GM would like us to go faster. We are working on this but we are also committed to a Just Transition ensuring interests of workers & communities are properly taken into account.”