More about the campaign to divest the MP’s Pension Fund from fossil fuels, and create a world-leading fund on responsible investment.
Our political leaders call for action on climate change but their pensions remain invested in fossil fuel companies whose business model is incompatible with international agreements to tackle climate change.
Divest Parliament works with MPs from across the political spectrum to call on their pension fund to halt and remove their investments in fossil fuels. By engaging with their own pension fund, MPs have the opportunity to show crucial leadership on climate change, responsible investment and the transition to a sustainable economy.
We ask that the Pension Fund quantifies, reviews and discloses the fund’s investments in carbon-intensive industries, engages in a dialogue with current and former MPs and publicly commits to phasing out fossil fuel investments over an appropriate time-scale. We suggest immediately freezing any new investment in the top 200 largest fossil fuel companies, and divesting from fossil fuel public equities and corporate bonds over 5 years.
If it’s wrong to wreck the planet, it’s wrong to profit from the wreckage, and our MPs have a crucial role to play in challenging the political power of an industry that continues to profit from the climate chaos it creates.
The MPs’ pension fund is known as the Parliamentary Contributory Pension Fund (PCPF). All MPs automatically become members of the fund when they are elected to office.
It currently has 646 active members (current MPs who are paying into the fund), 161 deferred members (former MPs who have not yet retired), and 1,010 retired members (former MPs who are retired and are receiving their pension).
According to its 2016 report the fund has total investments of £612 million.This includes £5.6 million in BP and £4.9 million in Shell. Both companies are among the fund’s top 20 holdings – along with mining firm Rio Tinto, British American Tobacco and Amazon – which were made public for the first time in March 2017. The pension fund has to date been unwilling to make public the full list of its investments.
The fund is governed by a board of 12 cross-party trustees: ten of whom are MPs or former MPs; the other two are chosen by IPSA (the Independent Parliamentary Standards Association) and the Prime Minister. The trustees look after the fund on behalf of MPs, and have a legal duty to run it in their best interests. As members of the fund, it is ultimately MPs money, and their voices should be heard.
A group of MPs, spearheaded by Green Party Co-Leader Caroline Lucas, have been engaging directly with the Trustees on issues of climate risk since 2014, and remain unconvinced that these risks are being sufficiently considered.
Their names will be included on the public list of supporters, and they’ll be kept up to date with further progress on the campaign, as well as opportunities to get more involved, including key meetings with trustees and local campaigners.
By having many MPs from across the political spectrum sign our pledge, we demonstrate growing political support for divestment from fossil fuels. This allows us to pressure the trustees of the MPs pension fund and means they take the issues more seriously. This is a numbers game. The more MPs we get, the more pressure the fund is under to act. This is why need constituents all over the UK to engage with their MPs on the issue and ask their MP to sign our pledge!
It’s crucial that MPs focus on an impactful, long term policy agenda to keep the vast majority of fossil fuels in the ground and build a sustainable economy. However, they can also show leadership in other areas, starting with the management of their own pension fund.
There are many reasons why MPs may want to join the thousands of organisations and individuals with assets worth over $5 trillion already divested, and join the fastest growing divestment movement the world has ever seen:
The Paris Agreement saw 196 countries commit to action on climate change to limit warming to 2 degrees, ideally 1.5. Fulfilling these promise means a step change in action today, including leaving 80% of known fossil fuel reserves in the ground.
From South African Apartheid to Tobacco, we know that divestment campaigns have had huge impacts at shifting the discourse on key political issues and making change in the past. And there’s no issue that needs a gear change more than climate.
Through significant political lobbying, the fossil fuel industry has been a key barrier to meaningful legislation on climate change. Similarly with Tobacco, a powerful divestment campaign sought to reduce the political power of Big Tobacco and brought in science based policy on smoking.
By addressing climate risk in their own pension fund and supporting the divestment movement, MPs can show commitment and leadership on tackling the crucial issue of climate change and challenge the lobbying of the fossil fuel industry.
Many of those divesting from fossil fuels have used this opportunity to re-invest in the greener, cleaner technologies of the future. Renewable energy is a rapidly growing sector, with a $3 trillion annual funding gap to achieve the scale required for transition.
The MPs’ pension fund is their own money, but the lack of transparency over where the money is going and how members concerns are addressed is an issue across the whole pension system. By addressing these issues in their own fund, policy makers can lead the way for more responsible investment practised across the board.
For many MPs integrity is important, and being invested in companies engaging in disruptive lobbying and causing climate change will be uncomfortable. They should be able to put their money where their values are.
Concerted action to decarbonise our economy, rapid technological advances in renewable energy generation and the physical constraints on extraction in a changing environment are expected to seriously devalue oil, coal and gas assets over the coming years and decades. Over $2 trillion worth of fossil fuel assets may become ‘stranded’, presenting a major financial risk to pension holders. This position has been endorsed by leading economists and financiers, including the Governor of the Bank of England, the World Bank and the G20’s Financial Stability Board.
With decarbonisation inevitable and the renewable energy sector growing rapidly, many prudent investors are divesting from fossil fuels to protect their returns.