At its meeting on Thursday 13th March, members of South Yorkshire Pensions Authority (SYPA) were forced to accept that its long standing policy of “engaging” with fossil fuel companies like BP and Shell, in an attempt to change their behaviour, had failed.
Sheffield Green Councillor and Pensions Authority member Alexi Dimond highlighted that BP, a company SYPA invests in, recently reneged on its climate targets,
Cllr Dimond said,
“BP will increase its oil and gas investment to £7.9 billion per year, while decreasing funding for renewables by more than £3.9 billion This is evidence that trying to engage with fossil fuel companies does not work.”
Cllr Dimond also cited a report on the engagement vs divestment debate by Border to Coast pension pool, which SYPA is a member of, which concluded that “there is no systematic evidence of investor engagement causing companies to take strong climate action that is against their long-term financial interests”.
He also pointed to a report from the Institute & Faculty of Actuaries (IFoA), and supported by the Government Actuaries Department, which says that the global economy could face a 50% loss in GDP between 2070 and 2090, unless immediate policy action on risks posed by the climate crisis is taken.
Following Cllr Dimond’s intervention, Authority members voted for officers to bring a revised Responsible Investment policy, Climate policy and Net Zero policy to the December meeting of the Authority.
Cllr Dimond said:
“Holdings in fossil fuels companies total just 2% of the entire fund at a time when we are around 160% funded, so we can easily afford to divest without any impact on our ability to pay pensions or significant detriment to the fund. There is also a strong argument that divesting from fossil fuels will mean a more stable climate and economy. That is good for everyone and pension funds.
“I don’t think there is any justification to continue to invest in these firms, given the threat to the entire fund from climate change caused by burning fossil fuels.”
