Greater Manchester councils join call for pension fund fossil fuel divestment

Executive members of Rochdale Council have signed a joint letter with five other local authorities urging the Greater Manchester Pension Fund (GMPF) to move decisively away from its current investments in fossil fuels.

Executive members of Rochdale, Manchester, Salford, Stockport, Bury and Wigan councils have all signed the letter, which calls for GMPF, run by Tameside Council, to take action to match the region’s existing target of becoming zero-carbon by 2038.

GMPF, the largest local government pension scheme in the UK, invests more than £1bn in oil and gas stocks each year, a strategy which has proven controversial amongst environmental campaigners.

However, the fund says it is also the largest investor in renewable energy and energy efficiency with £500m tied up in the industry, including large stakes in biomass.

A new report by environmental campaign groups Platform and Friends of the Earth shows that, at the end of the 2019/2020 financial year, local government pension funds had almost £10bn invested in fossil fuels. This research found that fossil fuel businesses accounted for 3% of the total value of the Local Government Pension Scheme - oil and gas investments account for £6.5bn and coal for £3.4bn.

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.

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.

The letter, organised by Manchester City Council’s Executive Member for the Environment, Councillor Angeliki Stogia, notes that other pension funds nationally and internationally are already divesting from fossil fuel companies and appeals for GMPF to up their ambition of becoming zero-carbon by 2050, bringing it into line with the city region's zero-carbon target of 2038.

Manchester and Salford City Councils have previously been informed that the fund is pursuing a strategy of acting as an “ethical investor”, encouraging fossil fuel companies to move towards low-carbon solutions, rather than divesting.

Earlier this year, Councillor Brenda Warrington, leader of Tameside council and chair of the GMPF, told the Local Democracy Reporting Service that the GMPF will continue to encourage companies to become carbon neutral instead of withdrawing investments.
 

Read more: Pension fund accused of ‘woeful’ response to calls to divest from fossil fuel firmsPublished: 16 February 2021

The letter welcomes GMPF’s plans for £2.5bn of its assets to be used to pursue a low-carbon strategy, but also notes that the South Yorkshire Pension Fund will be fossil fuel-free by 2030, while other councils such as Clwyd, Southwark, Islington, Lambeth and Waltham Forest, have already committed to fully divesting from fossil fuels.

Councillor Sara Rowbotham, deputy leader and cabinet member for climate change and sustainability at Rochdale Borough Council, said: “I appreciate it’s a balancing act for fund managers, fully protecting people’s pensions while helping them continue to grow and mature, but I’m equally interested in actively working with them to identify and overcome any obstacles in place which will mean they move toward disinvesting from fossil fuels.”

In a separate letter, Councillor Stogia has also asked the Mayor of Greater Manchester, Andy Burnham, to back the councils’ campaign for the pension fund to become net zero carbon by 2038 or earlier as part of his Mayoral election manifesto.

Councillor Angeliki Stogia said: “Councils across Greater Manchester are working hard to help the region become zero carbon by 2038 and have declared climate emergencies, making it clear that the situation requires immediate action and our full commitment to securing a cleaner, greener and more socially just future.

“The tide is turning towards renewable energy sources and continued investment in oil, coal and gas is only delaying the inevitable. We want Greater Manchester Pension Fund to make a bold statement which will help create the world we want to see for the generations to come.

"We stand ready to work with them to see what can be done and are urging ambition and action for a greener future.”

Extinction Rebellion in the North, part of the wider international movement against climate change, has been running a campaign with the message, ‘No pensions on a dead planet’ and has been asking council tax payers to speak out against the investment.

Extinction Rebellion wants the world’s governments to declare a 'climate and ecological emergency' and take immediate action to address climate change.

Mark Coleman, a member for Extinction Rebellion in Rochdale, said: “Council tax payers in Rochdale are probably not aware that they are funding fossil fuel investments, via contributions to this pension fund, thus contributing to the destruction of the planet and risking all we hold dear.

“It makes no sense for the council to declare a climate emergency and at the same time to continue to invest in oil and gas. The target of 2038 is just not soon enough.

“The science is saying we may have a very short time in which to act.”

Rochdale Borough Council declared a climate emergency on 17 July 2019, and was later that year named one of the most climate-friendly councils in the region by Friends of the Earth.
 

Read more: Rochdale Council one of most climate-friendly in Greater ManchesterPublished: 07 October 2019

Members of Extinction Rebellion Rochdale and Friends of the Earth met outside the council offices in Rochdale town centre in October 2020 in a safely-organised protest to ask the council to quickly make progress on its climate plan.
 

Read more: Extinction Rebellion Rochdale host protest at Number One Riverside to demand climate actionPublished: 16 October 2020