12th January 2022

Greater Manchester quietly published its updated Investment Strategy Statement in September. The changes followed a poorly publicised public consultation that received just 11 responses. However, 8 of those responses proposed that,

The Fund will decarbonise its portfolio by at least 15% per annum and become zero carbon by 2038 at the very latest, in line with the Greater Manchester decarbonisation pathway.”

What was the Fund’s response? The revised document says this:

GMPF’s long term goal is for 100% of assets to be compatible with the net zero emissions ambition by c2050 in line with the Paris Agreement. The decarbonisation goal will be regularly evaluated in line with the latest science and climate risk assessment and GMPF’s objective of maintaining long term financial performance.”

So the Fund will continue to invest in fossil fuel extraction and exploitation for nearly three decades. Why so slow? We can’t imagine why the Fund has not taken even the very modest step of aligning their decarbonisation target with the Greater Manchester Carbon Budget – 2038. The risks of stranded assets will continue to increase over that period, impairing “long term financial performance”. For a regional economy, like Greater Manchester, the task of decarbonisation is complex and challenging: buildings have to be insulated and their heating systems changed, transport systems have to be completely overhauled, industry has to change its production processes, and everyone in the area will have to change their behaviour.  For an investor like GMPF, however, all that has to be done is to sell those assets that have heavy carbon consequences – chiefly those in oil, gas and coal companies.

We recognise that for a large financial commitment, that won’t be done overnight, and that’s why when we started our campaign, seven years ago, we called on the Fund to divest over a five year period. Those seven years have been wasted with almost no moves to decarbonise, as we have documented here before.

Despite the fanfare about moving what turned out to be just 6% of the Fund’s fossil investments into a low carbon fund, and significant investments in alternative energy production (biomass and renewables), the Fund actually increased it holdings of fossil fuel company shares in 2019-20 (the last year for which there is published data).

The Investment Strategy Statement does offer an opening though. Paragraph 9.7 says,

GMPF, via its membership of the Northern LGPS, is a signatory to the Paris Aligned Investment Initiative’s Net Zero Asset Owner Commitment. GMPF will draw on the IIGCC’s Net Zero Investment Framework to reach its decarbonisation goal. This includes the setting of interim targets which GMPF is currently developing and will publish in due course.”

We have previously pointed out the lack of anything concrete in the GMPF’s decarbonisation “strategy” – no targets, priorities or timelines. So we very much look forward to seeing those targets, and will continue to pressure the Fund to decarbonise very rapidly. Readers might like to write to the Fund’s chair, Councillor Warrington to encourage the early publication of ambitious “interim targets” for decarbonisation. The more decarbonisation that can be done in the early years, the better.