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.

MP’s pension fund still investing in fossil fuels

Due to pressure from MPs and constituents

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.”

Policy delay

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 CambridgeLloyds 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.

Matt Mace

Comments (2)

  1. Keiron Shatwell says:

    As I have said time and time again and will continue to shout from the rooftops "IT"S NOT JUST FUEL!"

    Hydrocarbons are the feedstock for millions of everyday products including all the VITAL LIFESAVING MEDICAL EQUIPMENT that is now so vital.

    Stop thinking in terms of burning oil and gas but think about what else they are used for and imagine a world without petrochemicals and synthetic clothing.

    What the Government do need to do though is end their cushy Diamond encrusted Final Salary Pension and switch to the same Defined Contribution schemes the vast majority of the rest of the country are on, that have just seen a 40-50% decrease in value.

  2. Richard Phillips says:

    Caroline Lucas has a heart of gold, but lacks the technical knowledge of electricity generation.
    There is no natural source of the energy necessary to generate electricity, which is available on demand, at any time. This can only be provided by coal, gas or nuclear sources.
    All renewable sources are dependent upon the whims of nature. This is simply inadequate to meet our needs, and never will be adequate. It is a pipe-dream!!
    Until we have an adequate chain of reactors, sufficient to meet our electricity demand, with a margin to spare, we have to have fossil fuel, principally gas, for CCGT power plants. Full stop!!
    If the MP Pension fund does not invest in fossil fuel, other sources will, this self purification is simply self illusory.

    Richard Phillips

Action inspires action. Stay ahead of the curve with sustainability and energy newsletters from edie