South Lanarkshire Council is to write to Strathclyde Pension Fund calling on it to divest from fossil fuels.
This follows the approval of a successful motion put forward by Green Party councillor Kristen Robb ( East Kilbride East), who made a plea to councillors to call for South Lanarkshire’s money to be invested in positive change and not contribute to the climate crisis.
The motion was supported by a majority of councillors, who agreed that the council should write to Strathclyde Pension Fund to divest from fossil fuels as soon as possible.
This comes as the fund continues to invest in businesses that add to the climate crisis and councillor Robb called on it to “invest responsibly”.
The plans will also see the council developing a responsible investment policy of its own.
The motion faced backlash from the Conservative group, who put forward an alternative motion calling for the Strathclyde Pension Fund to take a positive stance and consult with their members on how they wish to see their money invested.
The Conservatives’ alternative motion faced defeat with only six councillors voting in favour of it, opposed to 54 voting in favour of councillor Robb’s motion.
Councillor Robb said: “I’m bringing this motion to help secure a safer and better future for pension fund members and for generations to come. I’m grateful for councillor Fagan’s backing for the motion and recognise the previous efforts from all parties to note the climate emergency.
“The opportunity with this motion now for all members is to turn words into action – to turn investments that are fuelling the climate crisis into ones which will help fund the net zero projects we need whilst securing returns for pension fund members and South Lanarkshire citizens alike.”
She added: "We don’t need more warnings from economists. Several years ago the previous governor of the Bank of England, Mark Carney, warned that as we move towards a net zero future, fossil fuels are increasingly seen as risky investments and assets that will be stranded, and he was right. From 2017 to 2020 Strathclyde Pension Fund lost 46 million pounds due to the fossil fuel fall in stock prices.
“This needs to change and today with this motion, we can send a strong clear message to Strathclyde Pension Fund to do much, much more of the good stuff they are doing but divest from fossil fuels which endanger our future and risk our pension funds.
“We as a council can put our words into action too, we can develop a rigorous investment policy to ensure that our banking and investments work for South Lanarkshire people and the planet.”
Councillor Joe Fagan (East Kilbride Central North, Labour), who seconded the motion, echoed these thoughts and welcomed the opportunity to invest responsibly.
He said: “All of us understand that the fund has a fiduciary duty to invest wisely and achieve the best outcome for the workers whose pensions depend on their prudent decision making. But what we also have to understand is that the world is transitioning towards net zero and many of those traditional investments are increasingly recognised. It’s not just been harmful to the environment and the climate but harmful to the long-term sustainability of the funding.
“Divestment for ethical and environmental purposes is driving a further shift away from risky fossil fuel investments on those financial sustainability grounds. It makes perfect sense that Strathclyde Pension Fund should review those investments urgently. There’s an opportunity to better align the funds’ ambitions with those of a responsible investment policy.”
Representing the Liberal Democrats group, Councillor Mark McGeever (Hamilton West and Earnock) welcomed the proposal.
He said: “On behalf of the Liberal Democrat group we are very happy to support this. Everyone agrees the world is in a climate emergency with a serious impact on our local communities and like local governments everywhere, this council is already dealing with fallout from that. We face enormous bills for adapting our buildings, for changing working practices and crucially more than everything else for protecting our residents and those who depend on local services from climate-related harms.
"Our commitment to protecting people and investing in the future cannot be squared with investing in those who pose that future the greatest risk. By any definition this is an incredible struggle and it’s one in which public money should not be funding both sides of that struggle.”
The Conservative group leader, councillor Alex Allison (Clydesdale East), challenged the motion and its feasibility and proposed his own plans.
He said: “One of the greatest challenges we face today is climate change and to meet this challenge we need to find credible ways to reduce or even eliminate the need for fossil fuels. I believe this motion would not help us in that objective.
“Reducing the need for fossil fuels by having readily available and affordable alternatives has to be the way forward. Currently looking at this motion, companies like BP would be affected, as someone who pumps out fossil fuels, but they are also the largest owners of EV charging points in the UK, how will it affect that? To have your electric car you need a battery, that needs lithium and copper and that needs to be mined. Are we going to target these companies as well? How will we be able to supply batteries?
“This does not follow through, it is basically a political statement and not an objective way of taking this forward.
“How would it affect your pensions? Well in my case maybe not much because I’m so close to getting one. But for a lot of younger people, it will affect their pensions.
“The type of action would not only increase the cost of energy hitting the least well off most. What we need to do is to have a positive attitude about what we can do to create another alternative. It is also for the members of the pension fund to decide how they want their money used and invested, not just us here in this room. So therefore I would suggest an alternative motion that the Strathclyde Pension Fund is to take a positive stance and increase the support for alternative sustainable companies and to consult with their members as to how they would wish their money to be invested as that will reduce need for fossil fuels and not ask the poorest in our communities to pay the price.”
Councillor Robb responded to these concerns, stating that the pension fund could still invest in companies who pledge to be environmentally friendly. She also stated that trade unions helped draft the motion with workers in mind.
She said: “It doesn’t include investment in any company that is doing the right thing. BP say they’re doing lots of things but it’s a very tiny proportion of their profits, they are still planning to extract a lot of fossil fuels. The committee and the elected members have the power to determine a mandate which just asks pension fund managers to exclude fossil fuels, not the good stuff the companies are doing but to exclude the highly damaging activity and ensure a good future for young people.
“Your pensions will be safe, non-fossil fuel stocks over the long term do better or equal to fossil fuel stocks, so the financial argument is blown out of the water there.”
She added: “I was very pleased that Unison supported this motion and took part in drafting it because those members quite rightly should have a say. But to date Strathclyde Pension Fund have refused to involve their members in deciding what their deferred wages are invested in. This motion calls for consultation with trade unions to have a meaningful consultation with fund members so they are consulted properly.”
Councillor Maureen Chalmers (Blantyre), depute leader of the SNP group backed the proposals, and said: “I support the point around the bottom line, which is much more than the financials it’s about the risks involved and the climate crisis. Councillor Allison mentioned all those younger people, if you attended the short meeting with Unison yesterday and other organisations, we heard the argument for supporting this motion and putting pressure on the Strathclyde Pension Fund to ensure we move with pace. I think there is quite wide agreement on supporting the movement and the SNP group will support this motion.”
Councillor Ross Clark (Larkhall) added: “Councillor Allison says this may not affect his pension as much as because he’s so close to receiving his. Well as the youngest member of the chamber I’m more worried about the planet being able to survive long enough so that I can even draw a pension.”
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