The West of England metro mayor has failed in a bid urging a local government pension fund to stop investing in fossil fuels.
Dan Norris attempted to formally call on the Avon pension fund to cut all investments in fossil fuel companies, at a West of England combined authority (Weca) meeting. But the motion was scuppered as two council leaders were unable to vote.
The £5-billion pension fund is thought to have £86.6 million invested in fossil fuel companies, despite local councils and Weca declaring a ‘climate emergency’ and pledging to work towards net-zero carbon emissions. Mr Norris said this investment should be completely cut by 2030, and said other council leaders elsewhere in the UK “haven’t chickened out”.
Read more: Metro mayor demands local government pension scheme cuts ties with fossil fuels
But Weca was unable to pass the motion because Toby Savage and Kevin Guy, the council leaders of South Gloucestershire and Bath and North East Somerset, left the room after declaring a conflict of interest as they are both members of the Avon pension scheme. Weca rules say any vote must need the metro mayor and at least two council leaders.
Mr Norris said: “Two of the four combined authority members declared an interest and had to leave. Because we’re inquorate, I can’t propose the motion. We also wrote to [the fund trustees] and they wrote back a very long letter, basically saying that they couldn’t do anything due to their duty to get a return, and that they didn’t have the flexibility to make the changes that we’re asking for.”
Questions were raised about the logic of divesting from fossil fuel companies, when some are heavily involved in renewable energy. Active investors and pension fund members also play a role urging these fossil fuel companies to increase their spending on renewables.
Cllr Winston Duguid, chair of the Weca overview and scrutiny committee, said: “Some of the large fossil fuel companies are some of the biggest and heaviest investors in energy at the moment, so when do you make the decision that they’ve crossed the rubicon? Orsted is the best example in Europe where 12 years ago it was mainly getting its income from fossil fuels and today it’s the largest offshore wind company in the North Sea.
“There are certain people far cleverer than myself or others in the room perhaps, who are looking at this day by day, active investors making sure that the likes of BP really are committed to net zero, even though it may be on a platform up to 2050.”
Before he left the room, Cllr Guy said: “Only 0.07% of the investment fund is with the five top oil and gas companies and overall only 1.4% of the total investment fund is with fossil fuel companies, which accumulates to £86.6 million. Compared to £1.4 billion investment in sustainable companies that are aligned with the Paris climate emergency. So the investment fund, through pressure from its members, is already pushing along these lines, and is a particularly green investment fund.”
More than 111,000 members are part of the Avon pension fund, which includes more than 400 employers like councils, universities, housing associations and charities. The fund is run by a committee made up of local councillors, employers and other representatives. Some other local government pension funds elsewhere in the UK have pledged to divest from fossil fuels, albeit gradually. Despite his failed motion, Mr Norris said he was still “determined”.
Speaking after the meeting, Mr Norris said: “Reaching our West of England net zero 2030 target won’t be easy — in fact, it's going to be hugely tough, really hard and very difficult. We will only succeed, as we must, if everyone pulls their weight from individuals to the biggest businesses and organisations, and that must include local pension funds too. Other local government pension funds have divested so we can, and must, too.
“The Lib Dem and Tory leaders decided to declare an interest so the motion couldn’t be voted on. Other council leaders in the UK have stood up to be counted, and not chickened out on the environment. The people of the West of England are ahead of politicians when it comes to the climate and ecological emergencies, so if other councils' pension funds can have a 2030 target — so can we. I remain determined to make progress on this and won’t stop until the Avon pension fund divests.”
