More about the campaign to divest the £500m Parliamentary Pension Fund of fossil fuels, and create a world-leading fund on responsible investment.
‘Divest Parliament’ is a campaign working with MPs from across the political spectrum to address the financial and moral risks related to their pension investments in fossil fuels. We push for action to champion responsible investment practices and reduce the fund’s fossil fuel exposure over an appropriate timescale.
We believe through engaging with their own pension fund, MPs have an opportunity to show crucial leadership on tackling climate change, responsible investment and supporting a sustainable economy, while aligning their money with their values and protecting themselves from financial risk.
We recognise the enormous power of divestment campaigns past and present, and see the rapidly growing fossil fuel divestment movement as a key lever to challenge the political power of the fossil fuel industry, dispel the myth that fossil fuels still equal prosperity and pave the way for the rapid transition to a renewable economy.
By increasing transparency, member engagement and addressing issues of climate risk and stewardship, the MPs pension fund could be aspiring to ‘best practice’ in relation to responsible investment.
We ask the Pension Fund quantifies, reviews and discloses the fund’s investments in carbon-intensive industries, engages in a dialogue with fund members 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 by reserves, and divesting from fossil fuel public equities and corporate bonds over 5 years.
A group of cross-party MPs and former MPs have been championing this cause and regularly corresponding with the MPs Pension Fund on issues of climate risk and transparency since 2014.
The answers given by the Pension Fund trustees, before dismissing the issue entirely at the November 2016 meeting, suggests the trustees are failing members in their understanding and management of climate risk – an alarming prospect for all fund members.
The ‘Divest Parliament’ campaign looks to support the MPs work, and demonstrate the breadth of support from MPs on this issue to demand action from the Pension Fund.
The responsible investment charity ShareAction campaigns for a better pensions system. They advocate that pension funds should be more transparent, communicate better with savers, improve their governance and practice responsible investment.
Their names will then be included on the public list of supporters, and they’ll be kept up to date with further progress on the campaign and their pension fund, as well as opportunities to get more involved, including meetings with trustees, media opportunities and photo ops.
It’s crucial that MPs focus on an impactful, long term policy agenda to keep 80% 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.
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 2015 accounts, the latest that are available, the fund has total investments of £589 million. Despite numerous enquiries by MPs to find out exactly what the fund is invested in, the Trustees have not yet disclosed any information. Unlike local government pension funds, the MPs’ fund does not consider itself subject to Freedom of Information legislation.
The fund does not specifically exclude any industry from its portfolio – the fund will therefore be invested in lots of things, including the arms trade and tobacco as well as fossil fuels.
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 has been engaging directly with the Trustees on issues of climate risk since 2014, and remain unconvinced that these risks are being sufficiently managed.