Here at Divest Herts we’re campaigning to remove investments in fossil fuels from Hertfordshire County Council’s Pension Fund. We’re residents of Hertfordshire, who want our council to make a moral stand against funding climate change through investments in fossil fuel companies. But we’re not all long haired hippies, we also know that there are sound financial reasons for removing investments in the companies of the past.
The Hertfordshire pension fund has over £129 million invested in risky fossil fuel companies.
Last year at the United Nations agreed to “keep a global temperature rise this century well below 2 degrees Celsius … and to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius.” The UK along with many other countries have now signed this agreement. Between 60-80% of known coal, oil and gas reserves of publicly listed companies are now unusable if there is to be a chance reaching these targets.
But what does this mean if we have investments companies like Shell and BP?
The World Bank and the Bank of England are warning of the risks of investing in fossil fuel companies.
Fossil fuel companies have a duty to their shareholders to be profitable – thus to keep extracting oil, coal and natural gas. But these international targets to reduce climate change mean that fossil fuel investment carries the serious risk of stranded assets: that is, assets that lose value or become liabilities before the end of their expected economic life.
HSBC Global Research warned that `We believe the risks of this occurring are growing’ and said that:
“We expect innovation in efficiency and technological advancements, including in renewables, battery storage and enhanced oil recovery, to alter the energy mix and pricing in the energy economy, potentially resulting in further stranding of high carbon and high cost fossil fuels.”
Other experts have commented :
“There are a wide range of current and emerging environmental risks that could result in stranded assets. These risks are poorly understood and are regularly mispriced, which may result in a significant over-exposure to environmentally unsustainable assets.”
Mark Carney, Governor of the Bank of England has said in a speech about the financial implications of climate change that to meet the 2°C target, it amounted to burning between just one-fifth to one-third of the world’s proven reserves of oil, gas and coal.
This amounts to $28 trillion of stranded assets over the next two decades.
“If that estimate is even approximately correct it would render the vast majority of reserves ‘stranded’ — oil, gas and coal that will be literally unburnable.”
What should Hertfordshire County Council do?
By divesting from fossil fuels, it gives the County Council an opportunity to invest in the new economy. Pensions can be harnessed to drive energy transition, create local jobs and support local innovation. There are a number of potential opportunities for reinvestment, from offshore wind funds (e.g. Green Investment Bank, Offshore Wind Fund) and green bonds to social housing, commercial retrofitting (e.g. Low Carbon Work Place Fund) and renewable energy co-operatives.
As well as to stop risky investments which could jeopardise financial return of their pension fund, it is in the best interests of fund members for their pension fund to stop investing in environmentally harmful industries to secure a resilient environment for their retirement. Therefore, divestment from fossil fuels is fully in line with the best interests of the pension fund members and the fiduciary duties of the Pension Committee.
Fossil free funds have been reported to outperform conventional ones. It is the Pensions Committee’s responsibility to maximise the return of the fund investments. Therefore it is financially strategic for the Trustee’s to organise to sell their shares in fossil fuel companies whilst they still can.
There are a variety of fossil free fund managers available including: the Alliance Trust, Arcadian, BMO, Kames, Legal and General, Newton and WHEB. At Divest Herts we believe that it would be be a wise move for the Pensions Committee to speak to their fund managers about transitioning to a fossil free index or to appoint new fund managers who are able to.
By supporting divestment from fossil fuels, it would show the recipients of the pension fund that the council is serious about responsibly investing in their future.
Divest Herts is part of an international movement to untangle our lives from fossil fuels.
Divestment campaigns from all around the world have been gathering momentum, challenging institutions such as universities, faith groups, charitable foundations and governmental organisations to remove investments from dirty fossil fuel companies. The value of institutions who’ve divested has now reached $3.4 trillion.
In the UK Divest Herts isn’t the only campaign asking a local authority to divest their pension fund. Last year it was revealed that local government in the UK invests £14 billion in fossil fuel companies like Shell and BP. Across the UK there are campaigns in 36 local authorities, all campaigning for local authorities to divest their pension funds from fossil fuel companies.
In October members of Divest Herts attended a Fossil Free UK campaigning weekend to work alongside and hear from others who are working on similar campaigns across the UK. Teachers, retired people, architects, and students were among those there – from Glasgow, to Sheffield, Yorkshire to London, all of these people had been brought together for a common goal: to campaign for a future free from the shackles of the fossil fuel industries.
Campaigners from Divest Herts were able to learn from those who had already made significant headway in urging their councils to divest. Divestment campaigners and Councillors have persuaded Waltham Forest, South Yorkshire and the council in Haringey to make commitments to removing pension fund investments out of fossil fuel companies.
The weekend was coordinated by 350.org who are building a global climate movement, to which Divest Herts are proud to be a part of.
Emma Brading, a resident of Rickmansworth attending the weekend as a delegate from Divest Herts said:
“It was an inspiring and uplifting weekend – to be around passionate campaigners, who are just ordinary people volunteering their time to create a better future is a wonderful feeling. We had many valuable insights, and a really interesting history lesson on the origins of divestment in the anti-apartheid movement.”
Here’s to divestment of pension funds all over the UK! And here’s to divestment of the £129 million+ which Hertfordshire County Council has in its pension fund.
Don’t forget to sign the petition here.
On Saturday the 13th February look out for the campaigners from Divest Herts – we will be out and about in Watford, Bishops Stortford and St Albans! Come and say hi!
We will be taking part in the Climate Coalition’s ‘Show the Love’ campaign to raise awareness of climate change and asking local residents to sign the petition to Hertfordshire County Council to ask that it divest its pension fund from dirty fossil fuels.
See the new film ‘Show the Love’ written by Michael Morpugo for the Climate Coalition campaign:
Hertfordshire County Council’s pension fund affects over 180 employers in Hertfordshire, including St Albans District Council, many local schools, and voluntary sector groups. The fund currently holds £129,078,000 in investments in some of the world’s most polluting fossil fuel companies, such as Shell and Rio Tinto.
The UK-wide ‘Show the Love’ campaign organised by the Climate Coalition encourages its’ millions of supporters to share what they love that will be compromised by climate change. Hertfordshire’s beautiful countryside, our football grounds, our wildlife and the food on our plates will all be affected by climate change.
Divest Herts Campaign Meeting
Sat 9th January 2pm
Venue: Reason Coffee Shop and Bookstore
Unit 3, Faircross House
116 The Parade
You are invited to come along and shape Divest Herts campaign – all interested Herts groups are welcome – please share this email to colleagues and local groups. Please let us know if you are coming email firstname.lastname@example.org
What is the Campaign Meeting for?
We want to plan actions for 2016 to build the campaign to stop Herts County Council from investing its pension funds in fossil fuels.
To prepare for the meeting please see http://gofossilfree.org/uk/divestment-guide/
Agenda 9th Jan 2016 2pm
1. Update on actions so far
2. Intro to Fossil Free Campaigning toolkit
3. Work on strategy – identify tasks
4. Day of Action 13/14th Feb Fossil Free/Climate Coalition/People & Planet
4. Develop the campaign – skills & expertise
What is Divest Herts?
Divest Herts is supported by Fossil Free UK and is just one of 42 UK Divestment campaigns targeting local government .
Divest Herts comprises groups across Watford & St Albans, including Transition groups, Global Justice Now, Friends of the Earth, and local Green Party groups.
We now want to build the campaign and invite groups from other towns across Herts county to join us – the more groups involved the wider reach we will have across the county with increased impact
I Want to Know More
If you want to know more please email Gwen and Gail at email@example.com