Open Letter to Pensions Minster in Support of Fossil Fuel Divestment

More than 70 prominent civil society leaders – including MPs, Councillors, pension fund trustees, investment experts, NGO directors, faith leaders and artists – have signed an open letter rebutting the Pensions Minister Guy Opperman’s public support of continued fossil fuel investments.

We are concerned and disappointed that Pensions Minister Guy Opperman has publicly discouraged pension fund trustees from divesting from fossil fuel companies (7 July 2020). The Minister’s recommendation that investors “nudge” and “cajole” oil and gas companies towards climate-friendly business models disregards the scale of the escalating climate crisis and ignores the clear moral, scientific and financial arguments for divestment. 

Mr Opperman’s anti-divestment stance also contradicts Government guidance (which lists divestment as one course of action for funds “seeking to demonstrate leadership”) and his own previous communication in which he praised the “shift away from fossil fuels” in pension fund portfolios. 

The Government is making welcome progress in embedding climate risk disclosure in the financial reporting of pension funds. It is therefore puzzling that the Minister dismisses divestment – which is rooted in sound financial risk management. The UN special envoy for climate action and finance Mark Carney, the G20’s Financial Stability Board and the Environmental Audit Committee have publicly warned of the exposure of UK investors, including pension funds, to the risks of overvalued carbon assets which will be left ‘stranded’ as the world transitions to renewables. The particular vulnerability of the oil and gas sector during the COVID-19 pandemic has tarnished its brand as a safe investment and provides an important warning signal to investors. 

Government efforts to establish the Paris Climate Agreement as a central reference for pension funds are warmly welcome. Yet Mr Opperman now undermines these by suggesting it is not necessary for pension funds to align investments with Paris at this point in time. With the devastating impacts of the climate emergency evident across the globe, we are left to wonder when the right moment might be. 

The world’s remaining carbon budget for the 1.5 degree temperature target is shrinking rapidly. Based on the principle of equity as enshrined in the Paris Agreement, Global North countries must cut carbon emissions faster, not delay and defer the necessary transformation to prolong business as usual. 

Fossil fuel companies are not working towards aligning their business models with the Paris Agreement, as the Minister implies. Despite clear evidence that we need to leave fossil fuels in the ground, companies such as Shell and Exxon are planning to significantly expand fossil fuel extraction by 2030. For every £1 invested by fossil fuel majors, over 95p ends up in further expansion of oil and gas reserves that are incompatible with a Net Zero trajectory. 

Astute investors know there are far better companies to invest in that are already delivering a green recovery and clean energy transition. At least 10 local authority pension funds are redirecting their investments away from fossil fuels and into clean energy solutions. Following calls from over 360 cross-party MPs for divestment, the Parliamentary Pension Fund has also begun to reduce fossil fuel holdings and shift investments into infrastructure funds dedicated to new solar and wind energy. 

Mr Opperman’s assertion that collaboration through investor engagement can turn fossil fuel majors into low-carbon companies is not borne out by evidence. Investor pressure has never reshaped any company’s core business and cannot transform an entire sector of powerful multinationals. Governments must use their powers as policy makers to force fossil fuel companies to become Paris-compliant or wind down. 

Divestment makes this easier: as pension holders reduce their exposure to this declining industry, they enable governments to accelerate the transition away from fossil fuels without adverse effects on the wider public’s hard earned pension pots.

Divestment is a logical course of action for prudent trustees who wish to manage the risks and benefit from the opportunities of the transition to a greener economy. Its financial merits and strong ethical appeal have created a growing demand for fossil free pensions. We appeal to Mr Opperman not to discourage others from following the actions that thousands of forward-thinking institutions have already taken.

Yours Sincerely,

  1. Councillor Alison Teal, Sheffield City Council 
  2. Councillor Anna Birley – Chair of the Pensions Committee, Lambeth Council 
  3. Anne Harris – Campaigner, Coal Action Network 
  4. Caroline Lucas – Green Party MP for Brighton Pavilion 
  5. Caroline Russell – Green Party Assembly Member, London City Hall 
  6. Caryl Churchill – Playwright
  7. Celia McKeon – Chief Executive, Joseph Rowntree Charitable Trust
  8. Dr Charlie Gardner – Lecturer in Conservation Science, Durrell Institute of Conservation and Ecology
  9. Christine Allen – Director, CAFOD
  10. Christian McAnea – Assistant General Secretary, UNISON
  11. Claire James – Campaigns Coordinator, Campaign against Climate Change
  12. Clive Lewis – Labour MP for Norwich South 
  13. Revd Dr Damian Howard SJ – Provincial, Jesuits in Britain
  14. Revd Dr Darrell Hannah – Chair, Operation Noah 
  15. Rt Revd David Atkinson – Assistant Bishop in Diocese of Southwark
  16. David Francis – Green Party Councillor, South Tyneside Council
  17. Revd Dr David Pickering – Moderator of the United Reformed Church National Synod of Scotland
  18. Councillor Dave Poyser – Chair of Islington Pensions Committee 2017-2019
  19. Revd Dr David Gregory – Chair of John Ray Initiative and former President of the Baptist Union
  20. Sir Ed Davey – Liberal Democrat MP for Kingston and Surbiton 
  21. Deborah Tomkins – Chair, Green Christian
  22. Eilidh Robb – UK Youth Climate Coalition COP Coordinator
  23. Fran Boait – Executive Director, Positive Money 
  24. Guy Woolf – Chair of Equity’s Young Members’ Committee 
  25. Helen Monks – Actor, Equity Young Members Committee Member & Co-Artistic Director of the theatre company LUNG
  26. Hugh Knowles – Interim CEO, Friends of the Earth
  27. Revd Dr Inderjit Bhogal, Former President of Methodist Conference
  28. James Marriott – Founder, Platform
  29. Kevin Warnes – Green Party Councillor for Shipley Ward, Bradford
  30. Mayor Jamie Driscoll – Mayor of North of Tyne Combined Authority 
  31. Jeffrey Newman – Emeritus Rabbi Finchley Reform Synagogue
  32. John Moloney – Assistant General Secretary, PCS Trade Union
  33. John Sauven – Executive Director, Greenpeace
  34. Revd Dr John Weaver – Vice President of JRI and former President of the Baptist Union
  35. Jonathan Gillett – Chair of Polden-Puckham Charitable Foundation
  36. Rabbi Jonathan Wittenberg
  37. Professor Joy Carter CBE DL CGeolFGS – Vice Chancellor of Winchester University
  38. Julian Corner – CEO, Lankelly Chase 
  39. Ken Penton – UK Climate Campaigner, Global Witness 
  40. Kevin Anderson – Professor of Energy and Climate Change, The Tyndall Centre 
  41. Laura Clayson – Climate Change Campaigns Manager, People & Planet
  42. Layla Moran – Liberal Democrat MP for Oxford West and Abingdon 
  43. Leila Mimmack – Actor 
  44. Liz Murray – Head of Scottish Campaigns, Global Justice Now 
  45. Revd Lucy Winkett – Rector, St James’s Piccadilly
  46. Llyr Gruffydd – Plaid Cymru AS / MS, Shadow Minister for Environment and Rural Affairs
  47. Mark Campanale – Founder & Executive Director, Carbon Tracker Initiative
  48. Mark Chivers – Volunteer National Coordinator UK: The Climate Reality Project Europe
  49. Sir Mark Rylance 
  50. Martin Love – Green Party Councillor for Shipley Ward, Bradford council 
  51. Martyn Day – Scottish National Party MP for Linlithgow and East Falkirk
  52. Councillor Mary Atkins – Vice Chair Overview & Scrutiny, Lambeth Council
  53. Miriam Turner – Interim CEO, Friends of the Earth 
  54. Baroness Natalie Bennett – Green Party Life Peer 
  55. Councillor Nick Forbes – Leader of Newcastle City Council 
  56. Nicky Philpott – Director, UK Health Alliance on Climate Change
  57. Nicolò Wojewoda – Managing Director for Europe, 
  58. Councillor Pat Cleary – Chair of Merseyside Pension Committee, The Green Party
  59. Patrick Harvie – MSP for Glasgow Region and Co-Leader of the Scottish Green Party
  60. Patrick Watt – Director of Policy, Public Affairs & Campaigns, Christian Aid 
  61. Councillor Paul Convery – Chair of Islington Council Pensions Sub-Committee
  62. Councillor Paul Niblock – Liberal Democrat, Chesterfield Borough Council
  63. Paul Parker – Recording Clerk, Quakers in Britain
  64. Paul Valentine – Actor, Equity Councillor, Green Party Trade Union Liaison  
  65. Professor Rebecca Willis – Lancaster Environment Centre
  66. Dr Richard Dixon – Director, Friends of the Earth Scotland 
  67. Richard Solly – Co-ordinator, London Mining Network
  68. Ronnie Cowan – Scottish National Party MP for Inverclyde  
  69. Dr Rowan Williams, former Archbishop of Canterbury
  70. Sam Coleman, Labour Councillor on Rother District Council
  71. Sam Swann – Actor 
  72. Councillor Scott Patient – Calderdale Council lead for Environment and Climate Change
  73. Sian Berry – Green Party Co-Leader and Assembly Member, London City Hall 
  74. Councillor Shirley Niblock – Liberal Democrat, Chesterfield Borough Council
  75. Sophie Howe – Future Generations Commissioner for Wales
  76. Sophie Neuburg – Director, Medact
  77. Stephen Smellie – Unison NEC Member 
  78. Councillor Tim Swift MBE – Leader of Calderdale Council 
  79. Victoria Mills – Cabinet Member for Finance Performance & Brexit, Southwark Council
  80. Wera Hobhouse – Liberal Democrat MP for Bath 
  81. Will Attenborough – Actor