When young people learnt that 40% of their exam grades were to be downgraded, it was striking to see protesting students holding placards reading “Give us fair grades not broken futures” and “How can I value a system that doesn’t value me?”. Leaders are failing young people on exams, and they are failing them on climate breakdown. This is a generation which will not roll over and have their future stolen, and this week has shown us that when they rise up, they are unstoppable.
And yet their future is still being overlooked by councils across the country as they continue to green light huge investments in fossil fuels which are driving the climate crisis and denying them a safe future. Here in the West Midlands, despite calls to divest from fossil fuels, councillors sit in pensions committee meetings and rubber-stamp a destructive policy of investing in these dirty fuels. They greenwash this policy by instead “engaging” with the fossil fuel companies, despite any evidence that this will make any difference to their fundamental business model, without any targets and without any sense of the urgency of scaling down these investments. The failure of “engagement” is demonstrated this week by a huge spike in Facebook advertising spend to convince Americans of the need to keep burning oil and gas following climate policy announcements by presidential candidate Joe Biden. If BP and Shell are serious about their climate pledges, why are they still fighting climate policy?
How are pensions holders benefiting from these investments? Traditionally pensions funds like investing in fossil fuels because of dividend, but this year Shell cut dividend payments by 66% and BP cut dividends by half. WMPF is also at risk of a price crash. In 2015, the price of coal collapsed, costing local government pension funds £683 million in losses.
The fossil fuel industry knows it is threatened by combination of falling renewable technology costs and climate policy by governments. This has driven a welcome but decades-late net-zero pledge by BP. Companies like BP do not change their ways when pension funds ask them politely. They do, however respond when divestment starts having a material impact on their bottom line. They do respond when they can’t hire staff because their toxic business model is exposed by divestment.
Divestment protects local government pension holders and the taxpayers who underwrite their pensions. Divestment sends a strong message to the market that society will not tolerate the climate being destroyed by their actions. And divestment protects young people in the West Midlands who expect to be treated fairly and who will not stand for a degraded planet ravaged by the lethal effects of global heating.
Your pension could build a better future for your children: here’s how.
The West Midlands LGPS Pension fund currently has over £490 million invested in the oil, coal and gas industries, who are driving the climate change that’s threatening all of our futures. It’s our money, we’ve worked and saved for it, it’s our retirement plans. And it’s our planet that we, our children and grandchildren have to live on.
We need to move beyond just taking pension money out of fossil fuel companies and putting it into slightly less damaging alternatives and start actively using our money to build the future we want together. The solution is to take back the money we have produced, and start investing it in building community-owned and run alternatives. This allows us to have more of a say in what types of green future we want to see in our communities, to create local jobs and address local concerns such as fuel poverty. We could invest in community-owned renewable energy, infrastructure such as trams, community-supported agriculture to produce healthy local food, or better social housing – the possibilities are huge.
This has already started to happen elsewhere. Lancashire pension fund has invested in Westmill Solar Cooperative, which produces enough power to run 1600 homes. And Islington council has invested £150 million from its pension in building social housing.
This is why Divest West Midlands is calling on the West Midlands Pension fund to divest from fossil fuels and start reinvesting in building the new green economy.
What would you like to see your pension fund money doing locally?
Look out for our report coming soon that covers the technical issues in more detail.
On Monday the 15th July Walsall Council will debate a fossil fuel divestment motion, calling on West Midlands Pension Fund to divest from oil , coal and gas. The motion is proposed by Councillors Shires, Barker,C. Bott, P. Bott and Young.
The motion says:
Walsall Council notes reports on BBC News 12 June 2019 by Roger Harrabin Environmental Analyst that the UK Government was to commit to almost zero greenhouse gas emissions by 2050 and Prime Minister Theresa May’s comments that:
There was a “moral duty to leave this world in a better condition than what we inherited” and that “Cutting emissions would benefit public health and cut NHS costs”.
On Tuesday 18th June, in declaring a “Climate Emergency”. This was a welcome symbolic step forward for the city. Unfortunately, Coventry failed to set out a meaningful target for climate change, as the council resolved to “recommend the course of action that we are currently undertaking”. Jim O’Boyle praised Coventry’s record on climate change, but falls in greenhouse gas emissions have been small and mostly due to rising poverty and deindustrialisation. Transport emissions remain stubbornly high, and the city’s highest source of greenhouse emissions comes from food.
Coventry needs to follow Birmingham’s lead and set out a target for net zero by at least 2030. In our proposed motion we set out a manifesto for achieving this target.
How will this be funded? Clearly government need to play their part, but the council also needs to follow Birmingham in calling for the West Midlands Pension Fund to divest from oil and gas companies that are pouring billions into exploring for more fossil fuels when they already have excessive reserves. These funds could benefit local green projects and divestment would send a strong signal to the global investment community that we cannot continue to bankroll climate destruction.
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.