Corbyn backs MP pension divestment as business leaders call for improved climate disclosure
A group of 100 MPS, including Labour's Jeremy Corbyn and the the Green Party's Caroline Lucas, have called for a £612m pension fund to divest from fossil fuels, while leading chief financial officers have endorsed the recommendations of the Task Force on Climate-related Financial Disclosures.
The cross-party Divestment Parliament pledge, originally championed by Caroline Lucas in 2016, calls for MPs' £612m pension fund to remove all investments related to fossil fuels. It was announced today (11 December), that Labour Leader Jeremy Corbyn and Shadow Chancellor John McDonnel became the 99th and 100th members to sign the pledge.
“Two years on from the historic Paris Agreement, our country must show leadership in confronting the existential threat posed by climate change,” Corbyn said. “One contribution we can make as MPs is to end the investment from our pension fund in fossil fuel industries, which is why I have signed the pledge. To help protect our planet, we must wean our economy off its fossil fuel dependence and do more to move towards clean and renewable energy.”
Corbyn joins MPs from Labour, the Conservatives, the Liberal Democrats, the Green Party, the SNP and Plaid Cymru in calling for the Parliamentary Contributory Pension Fund (PCPF) to disclose and limit its involvement will fossil fuel projects and investments.
Due to pressure from MPs and constituents, the PCPF publicised 20% of its holdings for the first time in May 2017. In 2016, the PCPF invested £5.56m into BP and £4.9m into Shell.
The value of investment funds committed to divesting away from fossil fuel firms and assets doubled in 2016 to $5.2trn. The movement was originally started on university campuses, but commercial investments and pension funds now account for 80% of the total.
Caroline Lucas, Green Party MP for Brighton Pavilion said: “It's utterly unacceptable that the Parliamentary Pension Fund remains so opaque, and that MPs' savings continue to fuel climate chaos. We need real transparency, and an ethical policy which ensures that our investments do not cause harm for the sake of short term profit.”
The signatory milestone comes as UK Prime Minister Theresa May arrives in Paris for an international summit to accelerate action on climate finance. The summit will focus on the Task Force on Climate-related Financial Disclosures’ (TCFD) recommendations, which seek to provide a framework for investors to disclose climate-related risks and opportunities.
Ahead of the summit, the chief financial officers from organisations representing more than $1.5trn in combined total assets, including Unilever, Tata Steel and Tesco, have signed a “statement of support” for the recommendations, through The Prince’s Accounting for Sustainability Project (A4S).
A total of 37 chief financial officers, 13 chief executives of accounting bodies and 17 chairs of pension funds have signed the support statement, and have called on others to improve disclosure practices.
A4S’s executive chair Jessica Fries said: "Action by the finance community is vital if we are to tackle climate change. We need visible leadership, and the combined commitment to support adoption of the TCFD recommendations from CFOs, accounting bodies and pension funds represents the kind of collective effort required to accelerate the shift towards a sustainable economy.
“Providing the necessary information, in particular in areas such as scenario analysis, is an important step forward in enabling market forces to drive efficient allocation of capital and to support a smooth transition to a low carbon economy. This is just the beginning and we are calling on other CFOs, accounting bodies and investors to adopt the recommendations."
The 13 accounting body chief executives represent 2.39 million accountants across 181 countries and were joined in supporting the statement by the pension fund chairs, who collectively represent $234.7bn in assets under management.
Unilever were part of the private sector movement to endorse the recommendations, which encourage companies to list climate-related risks alongside traditional financial filings. More than 100 business leaders from companies such as Bank of America, PepsiCo and Kering, collectively worth more than $2trn in assets under management, have committed to implement the recommendations.
Unilever’s chief financial officer Graeme Pitkethly added: "Its fundamental for every good business to manage and communicate risks and opportunities. We are already obliged to disclose material risk. Climate change is no different."