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FOR MEDIA REQUESTS CONTACT:

 

  • Anna Vickerstaff, 350.org Senior UK Campaigner, anna.vickerstaff@350.org (London, UK)
  • Melanie Mattauch, 350.org Europe Communications Coordinator, melanie@350.org, +49 151 58120184 (Berlin, Germany)
  • University campaigns: People & Planet, media@peopleandplanet.org (Oxford, UK)
  • Church campaigns: James Buchanan, Operation Noah Coordinator, james.buchanan@operationnoah.org (London, UK)

 

Latest Press Release

April 9, 2019

MPs Pension Fund Recognises Fossil Fuels as a Financial Risk

London, UK — The Trustees of the MPs Pension Fund have committed to developing a new Climate Change Investment Policy after more than 200 MPs raised concerns that climate change factors – such as competition from low-carbon energy sources and fossil fuels as stranded assets – represent financial risks to the fund.

Trustees of the Parliamentary Contributions Pension Fund (PCPF, the Pension Fund for serving and former MPs) recognised the significance of climate risk factors after correspondence with Green Party MP Caroline Lucas [1], who has been calling for the fund to divest from risky fossil fuels since 2015. In December, more than 200 serving and former cross party MPs called on the PCPF to phase out investment in fossil fuels [2]. Five of the top twenty investments – amounting to £20.53 million of the £733 million fund – are in fossil fuel companies including BP PLC, Royal Dutch Shell and Total [3].

Caroline Lucas, Green Party MP for Brighton Pavilion, said: “Protecting the natural world is now humanity’s greatest mission – so this change of tack from the MPs pension fund is very welcome.

“It has taken four long years to get to this point, but the trustees finally now appear to accept that fossil fuels are a risky investment, both for savers and for the planet, and that marks a significant change in policy.

“Parliament should be leading the way when it comes to tackling climate change – so I hope the PCPF seize this moment and adopt a world-leading climate policy, including setting a firm date for ending their investments in fossil fuels.”

Lord Deben, former Conservative MP and Chair of the UK Committee on Climate Change, said: “It’s encouraging that the PCPF are taking positive steps to act on climate change – the defining issue for governments and markets of the next century. The PCPF should now adopt an investment strategy that shifts investment towards companies driving innovation in low-carbon technology – and over time, remove their investments from coal, oil and gas altogether. Aligning investment with the 1.5 degree aspiration of the Paris agreement is the best way to protect our prosperity for many generations to come.”

Sir Ed Davey, Liberal Democrat MP and former Secretary of State for Climate Change and Energy, said: “All pension trustees ought to ensure their investments take account of climate risk, so it’s right Parliament should take this initiative. The best way is to switch funds from fossil fuels into clean technologies, as these are already highly profitable without the long term carbon risk of oil, gas and coal.”

Danielle Lawson, a Climate Lawyer at ClientEarth, said: “The scale and immediacy of the financial risks of climate change have led the PCPF trustees to develop a standalone investment policy on climate risk. While we hope that this step will be followed by trustees of other pension funds, trustees need to remember that their legal duties to invest prudently and in members’ best interests mean that it is their actions, not words, that scheme members and the courts will ultimately look to.”

Tytus Murphy, Divest Parliament campaigner at 350.org, said: “After thousands of constituent emails, hundreds of MP pledges, tens of questions in Parliament, countless tweets and an FOI or two, we’ve taken a very big step forward to winning the Divest Parliament campaign. MPs must lead by example by divesting from risky fossil fuel companies and positively invest in a sustainable future that we can all thrive in.”   

The largest individual holding made by the PCPF is in BP PLC [3]. On average, fossil fuel companies dedicate only 1 per cent of their spending to clean energy projects [4]. If the fund does agree to drop its investments in coal, oil and gas, it will join the Irish National Infrastructure Fund, the New York State Pension fund, local authorities such as Waltham Forest and Southwark and two thirds of UK universities in committing to fossil fuel divestment [5].

ENDS

NOTES

[1] Correspondence from February 8th between Caroline Lucas and Brian Donohoe (Chair of the PCPF Trustees) is available on request.

[2] Pledge text available here and full list of supportive MPs available here. The campaign asks the Pension Fund to ‘quantify, review and disclose its investments in carbon-intensive industries, engage in a dialogue with fund members and publicly commit to phasing out fossil fuel investments over an appropriate time-scale.’

[3] Annual report of the MPs Pension Fund is available here. Individual investments: BP PLC (£7.33 million), Royal Dutch Shell A (£3.67 million), Rio Tinto (£3.67 million), Royal Dutch Shell B (£2.93 million) and Total SA (£2.93 million).

[4] A recent report by Carbon Disclosure Project revealed that on average, fossil fuel companies allocate just 1.3 per cent of their total 2018 capital expenditure to green energy projects, coverage in The Financial Times.

[5] To date, over 1000 institutions across the globe – representing funds worth over $8 trillion – have made some form of divestment commitment. Full list of commitments available here. 

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