MP’s pension fund still investing in fossil fuels
MPs have yet again called for the trustees of the Parliamentary Pension Fund to divest from fossil fuel companies Royal Dutch Shell and BP, having finally integrated investment into renewables into the fund.
The £733m MP Pension Fund has faced calls from ministers since 2014 to divest from fossil fuel assets in accordance with the need to limit global heating to no more than 2C as envisioned by the Paris Agreement.
The Fund’s holdings in fossil fuel companies have decreased following public lobbying and pressure from ministers and for the first time now has 5% of its investments dedicated to a “low-carbon investment vehicle” that will help build solar capacity globally. However, the annual update of the fund also disclosed that £8m remains invested in Royal Dutch Shell and £4.4m has been invested into BP.
The cross-party group Divest Parliament has been led by Green MP Caroline Lucas, who has been lobbying the Parliamentary Pension Fund to divest its fossil fuels holdings since 2014. It is now supported by 360 serving and former MPs including all Labour leadership candidates, the Liberal Democrats leads and senior Conservatives.
Caroline Lucas, Green Party MP for Brighton Pavilion said: “Investing in clean energy is clearly the right thing to do, financially and for the future of our planet, so I’m glad the Parliamentary Pension Fund is doing this. But it has to also stop investing in Shell and BP.
“Parliament declared a climate emergency nearly a year ago, and the parliamentary pension fund needs to fall into line with this by ending the support for fossil fuels. These investments cannot be justified on ethical, environmental or financial grounds, and they undermine MPs’ credibility in addressing the climate emergency. They have to stop.”
The trustees of the fund were set to announce a “Climate Change Investment Policy” in November 2019, but the policy has seemingly been delayed and no new publication date has been announced.
With the UK building green finance into its COP26 preparations – provided the event can still go ahead – MPs have called for the fund to join other pension funds in divesting from fossil fuels.
The likes of the National Trust, Legal and General Investment Management (LGIM), the University of Cambridge, Lloyds of London, Aviva, Allianz, Axa, Legal & General, SCOR, Swiss Re and Zurich and The Church of England have now all begun or completed their divestment processes.
Former Bank of England Governor Mark Carney, the Environmental Audit Committee and major global fund managers have all repeatedly warned that pensions are at risk by exposure to overvalued carbon assets as the world moves to cheaper renewables and governments legislate for net-zero emissions.
Think tank Carbon Tracker has warned that major oil and gas companies risk wasting £1.8trn ($2.2trn) on stranded assets by 2030, which will impact the shares owned by the Parliamentary Pension Fund.
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