Call for county council to divest funds from fossil fuels

Discussing the merits of divesting pension funds from fossil fuels at County Hall is an '˜important first step', according to campaigners.

Thursday, 23rd November 2017, 10:38 am
Updated Friday, 8th June 2018, 2:02 am
Worthing Climate Action Network outside County Hall in Chichester

Members of Worthing Climate Action Network (CAN) were invited to give a presentation to West Sussex County Council’s pensions panel earlier this month.

Earlier this year the group submitted a petition to the county council and Adur & Worthing Councils to divest all funds currently invested in fossil fuel companies and instead invest in renewable resources.

They argued that action needed to be taken at all levels to meet the targets set out in the Paris Agreement, with divestment making ethical and financial sense.

Afterwards, Michelle Furtado, a member of Worthing CAN who works as a sustainability director, described the meeting as an ‘important first step’.

She said: “They listened very well to us.

“It was about as good as can be expected and they agreed to take the climate change risk into account.”

Although it is implementing a de-risking exercise, she and others called on the authority to fully understand climate change risk exposure across all the pension fund’s assets.

A statement from the group to the pensions panel said: “To stop catastrophic climate change, we have to keep fossil fuels in the ground and transition quickly towards a clean renewable economy.

“The scientific community unanimously agrees the main factor in driving climate change is the burning of fossil fuels.”

It added: “As well as the ethical and security grounds for divestment, there are strong financial ground for taking action, given the increasing risks posed by holding high-carbon investments.”

This came as the latest round of United Nations-led climate talks opened in Bonn, with delegates from across the world meeting to hammer out the details after the Paris agreement was reached.

The Pensions Panel is responsible for dealing with the county council’s specialist advisers on pensions, dealing with the investment policy generally, and managing pension fund investments.

Administering authorities for pension funds such as the county council are required to put together an investment strategy statement in accordance with Government guidance.

The statement, which was finalised in March this year, will be revised as appropriate as part of the panel’s investment strategy review, and has to be reviewed every three years.

According to a briefing note from officers the pension fund’s current statement says: “At the present time the panel does not take into account non-financial factors when selecting, retaining, or realising its investments.

“The Pensions Panel has directed the fund managers, in acting in the best financial interests of the fund, to consider, amongst other factors, the effects of social, environmental and governance issues on the performance of a company when considering the acquisition, retention or realisation of investments for the fund.”

Bob Smytherman, Liberal Democrat county councillor for Tarring, said: “I was delighted to raise the issue of divestment from fossil fuels on behalf of Worthing Climate Action group at the county council meeting earlier this year and I welcome this being debated by the Pension Panel.

“Long-term investors are increasingly aware that fossil fuels are going to be in decline, to be replaced by cheaper and cleaner renewable energy sources.

“With the rapid rise of renewable energy and the Paris climate agreement West Sussex can send a strong signal to investors that the age of fossil fuels is coming to a rapid end and the business model simply outdated it now makes good sense for prudent investors like the county council to distance themselves from a rogue and dying industry.”