About Fossil Free Greater Manchester and pensions divestment
IN RESPONSE TO THE CLIMATE EMERGENCY, WE ARE CALLING UPON THE GREATER MANCHESTER PENSION FUND TO…
- Make the fund fossil free within the next 2 years.
- Immediately move all investments out of the most polluting fossil fuels (coal, tar sands & fracking).
- Develop a strategy to invest in local climate solutions in Greater Manchester.
Over 340,000 Greater Manchester pension fund holders’ retirement funds are at risk because of their exposure to risky fossil fuel investments. These members of UK local authority pension fund GMPF (the Greater Manchester Pension Fund) are faced with the prospect of a diminished pension pot because of their pension fund’s continued policy of investing in carbon-intensive firms such as Shell, BP and the large mining companies.
We know that the vast majority of fossil fuels need to stay in the ground to meet globally agreed climate targets. So any action by governments to limit carbon emissions will leave remaining fossil fuels reserves as ‘stranded’ assets in a “carbon bubble”- assets which can never be used. Funds which continue to invest in fossil fuels can expect to suffer considerable losses when this “bubble” bursts.
By investing £1.3 billion in fossil fuel extraction, our local governments are implicated in profiting from climate change. As public bodies, local governments have a responsibility to work for the public good, not financially and politically supporting the most destructive industry on the planet. Fossil fuel investments undermine existing local authority climate change mitigation and adaptation strategies and commitments. Notwithstanding the preference of GMPF for a strategy of engagement with companies, the fossil fuel industry shows no sign of attempting to change its behaviour to adapt to the risks of climate change, spending a greater proportion of its income on capital investment than other sectors, which in this case mostly means exploration for yet more unburnable fuels. This may be one of the reasons that non-fossil fuel investments are currently out-performing fossil fuel stocks, which have also lost considerable value lately.
By following the example of a growing number of pension funds, charities and other investors in divesting from fossil fuels, the Greater Manchester Pension Fund could:
- reduce the financial risk to its portfolio (volatility, income reduction and asset depreciation) and thereby protect the pensions of its members,
- mitigate against the risk of class action in the future (one reason they have already divested from tobacco),
- send a strong signal to the fossil fuel companies and the markets that the epoch of fossil fuels is at an end and decisive action on climate change is needed,
- re-direct investment to environmentally and socially desirable developments so strengthening sectors such as clean energy, while providing much needed investment in the Greater Manchester economy.