The value of shares of oil companies held by UK public pension funds has fallen by £ 2bn in less than four years as pressure mounts on pension plans to withdraw support from fossil fuel producers harmful to the environment.
Pension funds around the world have taken steps to adjust their portfolios to investment risks resulting from climate change, but divestment from oil companies remains rare, despite evidence that uncontrolled consumption of fossil fuels leads to disaster global environment.
The value of shares of nine major oil companies, including BP and Royal Dutch Shell, held by 56 local government pension funds collapsed by half, from £ 3.6 billion at the start of April 2017 to 1 , £ 8 billion, according to estimates compiled by the environmental campaign. Platform London group. The decline in value has reinforced the argument for divesting from fossil fuels, the group said.
“If municipal pension funds are sincere in fighting the climate emergency and safeguarding the interests of their members, the first step to take is to do so. . . divest stranded oil and gas stocks, ”said Robert Noyes of Platform London.
Greater Manchester’s £ 17.2bn pension fund suffered the biggest loss estimated at £ 375m, or more than £ 1,000 per member. The estimated losses for West Yorkshire and Nottinghamshire were £ 211m and £ 81m respectively.
Platform London has submitted Freedom of Information requests to obtain data from all UK local government pension funds. He ruled out those who said they would divest or reduce their oil investments.
Dividends from fossil fuel companies have historically provided a vital source of income for pension funds, but payouts have been slashed this year as producers struggled with reduced demand.
At the same time, the long-term risks of investing in fossil fuel companies are growing concerns as governments around the world seek to do more to make energy systems sustainable.
Three in four UK pension schemes say they lack sufficient data on the risks of climate change, according to a new survey which suggests that gaps in understanding the impact of global warming could lead to losses for retirement savings. million workers.
“Pension plans understand that climate change presents risks and want to turn this concern into action, but they are limited in what they can do because it is difficult to get the data,” said Pat Sharman, CEO company of Caceis, Crédit Agricole. business unit that carried out the survey.
Seventy percent of a group of 93 UK pension schemes also said they had not received enough information on climate risk data from their external asset managers.
Larger pension plans with assets over £ 5 billion are expected to disclose climate risks by the end of 2022.
“This will set the tone for reporting on climate change across the pension industry. Trustees will need the tools and knowledge to meet the new demands, ”said Joe Dabrowski of the Pensions and Lifetime Savings Association, which represents workplace pensions in the UK.
Northern LGPS and LGPS Central, the investment managers of the Greater Manchester, West Yorkshire and Nottingham pension plans, did not respond to requests for comment.