This Tuesday, 11th June, Birmingham City Council voted unanimously to commit to a 2030 target for net-zero. This was a bold and necessary commitment which will shape all decision making in the city council over the coming years. Councillors spoke passionatly about improving home insulation, decarbonising transport and ensuring a just transition. But I want to highlight the speech by Cllr John Clancy who pointed out that in two years since Birmingham City Council came together to call for the West Midlands Pension Fund to divest from fossil fuel companies, nothing has happened. Here is a transcript of his speech:
Clearly this is an outstanding motion, which deserves our support which fills me with confidence in our future. However two years ago next month this council came together as we have done today to commit to a motion that made Birmingham City Council pledge to review its investment strategy and develop and implement a responsible investment policy which rules out new investments in fossil fuel companies. Do you remember that? That was two years ago next month. We came together.
In particular we took a view that the West Midlands Pension Fund (my favourite body as you all know) should immediately freeze any new investments in the top 200 publicly traded fossil fuel companies; to divest from direct ownership and in any co-mingled funds that include fossil fuel public equities and corporate bonds within five years; set out an approach to quantifying and addressing climate change risks affecting all other investments; and so on and so forth.
It was very important that we passed that. I cannot see any evidence actually that that has had any impact at all. And if you look at the top 20 investments of the West Midlands Pension Fund, you will see oil companies, and I think the amount invested in them has actually increased in the last two years. So BP – two BP funds in particular; we’ve got a whole range of mining companies that we’re invested in.
We have to take a view that if the city council is going to be net zero carbon by 2030, we have to look at what our investments in the West Midlands Pension Fund are doing at the same time.
Now, you may not know how much money went from this City Council to the West Midlands Pension Fund this last year, because the accounts are out. Last year, this city council gave to the West Midlands Pension Fund to invest for its employees and former employees half a billion pounds – in one year. That’s how much we’re paying into that fund. You think how much is going into that fund between now and 2030.
Now it has to be said about 80% of those funds are just in equities. They’re invested wherever. Very little is invested in this country, and we did in our motion two years ago ask to look at what local investment policy that pension fund was going to start to invest towards. I can see no evidence of that having happened. This year whilst we handed an extra 100 million pounds to that pension fund, it paid out £80 million to its investment managers. And those investment managers need to start advising how we start to divest, because it is a case of if you don’t decarbonise capitalism, it’s going to fail.
And we need to get to a situation where most of the fossil fuel companies in the equity markets are nowhere near getting to their Paris commitments. And the pension funds needs to divest from them or explain why that is not going to harm the beneficiaries of those pension funds.
So can we have in the task force a real effort to start to focus the minds of the West Midlands Pension Fund, investing our money. Thank you Lord Mayor.
We wish to thank Cllr Clancy for his words. He is absolutely right. It is unsustainable that the fund is putting its benificiaries pensions at risk by investing in fossil fuel companies which are driving the global climate and ecosystems to the brink of collapse. The fund must act now and divest from fossil fuels, as demanded by Birmingham City Council.