Pulling out of fossil fuel investments 'not in the best interests' of pension fund - report

A report has concluded that pulling out of investing in climate change-causing fossil fuels is "not in the best interests" of 50,000 pensioners in Shropshire.

Shirehall Shrewsbury Shropshire Council
Shirehall Shrewsbury Shropshire Council

But a report to the Pensions Committee of Shropshire County Pension Fund - on which public sector pensioners rely for an income in retirement - recommends that the fund should "move to net zero carbon investments" by 2050.

This, the report says, is the most effective and thorough way forward for the fund, which has members working in 160 organisations across the region, to help manage climate change.

The report follows a motion agreed by Shropshire Council in July 2020 to ask the pension fund to reinvest funds invested in fossil fuel-dependent assets. The council also wants to develop an ‘impact investment’ directed towards internationally-recognised sustainable development goals and/or investment in a local sustainable economy.

It also proposes investing £130 million to a sustainable equities fund. And it wants to take money invested in top 100 FTSE companies and switch it to a low carbon net zero fund.

The report also argues that exerting influence from within the system as a shareholder would have greater impact than simply withdrawing the fund’s investments.

A statement from Shropshire Council said that "after considering advice from industry experts and undergoing extensive training, the fund does not agree that divesting from fossil fuels is in the best interests of the fund’s 50,000 members."

The report adds that it can have a greater impact on climate change by making the commitment to be net zero carbon by 2050, setting carbon reduction targets in the meantime, and supporting climate stewardship activities.

The Pensions Committee, which is made up of councillors from Shropshire Council and Telford & Wrekin Council as well as a pensioner representative, will meet to discuss the report on Monday, January 17.

This will include presentations from investment experts who helped to write the report, as well as a presentation from campaign group Fossil Free Shropshire.

Councillor Julian Dean, a Shropshire Green party councillor and Shrewsbury mayor, said if confirmed the decision to keep investing in fossil fuels would be "murderous to future generations and risky for our pensioners."

Councillor Dean tweeted: "COP26 worst bit of green washing came from finance sector. Looks like Shropshire Council pensions committee about to do their own version."

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