Terminally ill man challenges West Yorkshire Pension Fund to stop funding the climate crisis

Nick H and Julia

 

Nick Hodgkinson, a member of West Yorkshire Pension Fund (WYPF), has Motor Neurone Disease, a terminal illness with no cure. He uses a wheelchair and needs a ventilator to breathe. He said: “I don’t expect to live long enough to claim my pension. But I’m determined to do everything I can to ensure a decent future for the next generation. WYPF is fuelling the climate crisis by investing hundreds of millions of pounds in companies like Shell and BP. That has to stop.”

On 24 February Mr Hodgkinson met the chair of WYPF, Cllr Andrew Thornton, (Royds, Labour), to ask him when WYPF is going to stop funding climate breakdown, and prioritise the wellbeing of Bradford’s citizens.

Research shows that Shell and BP are among ten companies whose activities are directly linked to more than one-third of all CO2 emitted since 1965. The role of CO2 emissions from oil, coal and gas in causing the climate crisis has been well known since 1965. (1) A recent UN study shows that the world’s major fossil fuel producers are on course to exceed the limits set out in the Paris Agreement to limit global heating by 50% to 120%. (2)

Mr Hodgkinson said: “WYPF’s latest annual report says it promotes ‘engagement’ with fossil fuel companies – including Shell and BP – pressing them to act in line with the Paris Climate Agreement. That obviously hasn’t worked. Shell’s latest annual report shows that it ‘invested’ £25 billion in oil and gas in 2018/2019 (3) and BP’s website boasts about their many new projects to extract oil and gas (4). Shell and BP are continuing to make profits when this means our future will be a nightmare of floods, storms and wildfires, homelessness, food shortages and conflict over clean water.”

“There is also evidence that these companies have spent millions lobbying governments to “delay, control or block policies to tackle climate change. Last year BP spent over $50m on lobbying against policies to tackle the climate crisis. (5) We cannot trust fossil fuel companies to change by WYPF and others ‘engaging’ or talking to them when they are clearly untrustworthy and have no intention of changing.” Mr Hodgkinson asked Cllr Thornton how long WYPF believes that ‘engagement’ with fossil fuel companies such as BP and Shell will work – when there is no evidence that it has had any effect. Cllr Thornton was unable to give a timescale.

Mr Hodgkinson spoke of the urgent need for action: decisions made in the next couple of years will determine whether the worst extremes of climate breakdown can be avoided. (6)

Mr Hogkinson also expressed his concern that West Yorkshire Pension Fund at their recent AGM (November 2019) did not mention climate change as a risk to investments, despite considerable evidence that this is the case. Cllr Thornton admitted yesterday that the omission was a mistake.

Other issues discussed were that WYPF has also recently claimed that it would have lost money if it stopped investing in fossil fuels. (7) However omitting fossil fuel stocks from FTSE and MSCI indices has resulted in an improvement in performance and returns over the last five to nine years. (8) Mr Hodgkinson asked Cllr Thornton to explain how it made its calculations, Cllr Thornton said he would send this information.

Financial predictions warn that oil and gas prices will fall, making those investments worthless, just as has happened to coal. So Mr Hodgkinson also asked Cllr Thornton the same question that the former Governer of the Bank of England Mark Carney has asked all investors: ‘What is your plan?’ The Bank’s governor has spoken at length about the need for the financial system to accelerate its efforts to tackle the climate emergency, warning that firms that ignore the crisis will go bankrupt. Carney has recently said that banks should be forced to disclose their climate-linked risks within the next two years (9) and also advised that all companies and financial institutions must justify their continued investment in fossil fuels, warning that assets in the sector could end up “worthless”. (10)

Cllr Thornton promised to reply – Pension Fund members look forward to hearing how West Yorkshire Pension Fund plans to respond to the climate crisis and to prevent WYPF member pensions losing value via ‘worthless’ assets.

References

  1. https://www.theguardian.com/environment/2019/oct/09/revealed-20-firms-third-carbon-emissions?CMP=Share_iOSApp_Other
  2. https://www.independent.co.uk/environment/climate-change-global-warming-carbon-emissions-neutral-targets-un-report-a9218181.html
  3. https://reports.shell.com/annual-report/2018/?accept=1
  4. https://www.bp.com/en/global/corporate/investors/upstream-major-projects.html
  5. https://www.theguardian.com/business/2019/mar/22/top-oil-firms-spending-millions-lobbying-to-block-climate-change-policies-says-report?CMP=Share_iOSApp_Other
  6. https://www.nature.com/articles/d41586-019-03595-0
  7. https://www.reuters.com/article/us-britain-pensions-divestment/british-pension-schemes-warn-on-cost-of-fossil-fuel-divestment-idUSKBN1ZJ1EK
  8. See Friends of the Earth briefing paper – link in Notes for Editors below
  9. https://www.theguardian.com/business/2019/oct/15/bank-of-england-boss-warns-global-finance-it-is-funding-climate-crisis?CMP=Share_iOSApp_Other
  10. https://www.theguardian.com/busines/2019/dec/30/firms-must-justify-investment-in-fossil-fuels-warns-mark-carney?CMP=Share_iOSApp_Other

 

Notes for editors 

Friends of the Earth (FoE) challenge WYPF’s methodology: in January 2020 FoE published a briefing paper, rebutting claims that fossil fuel divestment would damage local government pension fund returns. Please contact Jane Thewlis for the full briefing.

Petition by Fossil Free WYPF: 

https://campaigns.gofossilfree.org/petitions/divest-west-yorkshire-pension-fund-from-fossil-fuel-investments

 

We call upon the West Yorkshire Pension Fund to:

 

Make a public divestment statement committing the West Yorkshire Pension Fund to:

 

  1. Immediately freeze any new investment in the top 200 publicly-traded fossil fuel companies with largest known carbon reserves (oil, coal and gas)

 

  1. Divest from direct ownership and any commingled funds that include fossil fuel public equities and corporate bonds in the top 200 list and shift these funds to lower risk, ethical investments within 5 years

 

  1. Advocate to other pension funds, including members of the the Local Authority Pension Fund Forum and Local Government Pension Scheme to do the same

 

  1. To do the above in a timely manner – by setting up a working group to report back, within three months from the submission of this petition, on a strategy to bring about divestment

Disappointment at West Yorkshire Pension Fund’s inaction on fossil fuel investments

Councillors and campaigners say Pension Fund is ignoring financial and ethical arguments for divestment

Following meetings of the West Yorkshire Pension Fund (WYPF)’s Investment Advisory Panel and Joint Advisory Group in Bradford on Thursday 30 January 2020, campaigners are bitterly disappointed by the WYPF’s continued intransigence about its fossil fuel investments. Campaigners from Fossil Free West Yorkshire, supported by over 50 councillors from across West Yorkshire, argue that the investments are fuelling the climate crisis and that the £933 million fossil fuel investments also pose a financial risk to the pension fund.

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On Thursday 30 January protesters from across West Yorkshire attended a demonstration outside Bradford City Hall to highlight the financial and ethical reasons for the WYPF to divest from fossil fuels. However, at a meeting of the WYPF Joint Advisory Group held inside the building that day it was announced that the WYPF would not be divesting from fossil fuels but instead “The Administering Authority and Investment Advisory Panel keeps the effect of climate change on future returns under review and will commission modelling or advice from the Funds Actuary on the potential effect on funding as required”.

Jenny Lynn, Councillor for Calderdale Council and member of the WYPF Advisory Panel, said:  “There was a  motion presented to the Investment Panel, asking for an independent consultant to look at the practicalities of how the WYPF could disinvest over a three year period and why it might want to.  I’m very disappointed that, as a panel, we were unable to agree even to investigate our options further to make an informed decision. The financial risks associated with the investments held in fossil fuel companies must be analysed by the panel.”

Jane Thewlis, from Fossil Free West Yorkshire said ”We are shocked that the WYPF is ignoring the financial advice of Mark Carney, the Governor of the Bank of England, and other financial analysts who are saying that the risk of ‘stranded assets’ and the carbon bubble is very real. Increasing competition from low carbon technology and more stringent climate policies will cause fossil fuel demand to drop permanently in the near future. Energy strategists at Carbon Tracker have forecast that this drop in value could occur in the early 2020s.”

The Fossil Free West Yorkshire group are also demanding that the WYPF publish full details of their analysis to support their recent claim that divestment would result in financial losses to the pension. In a recent Reuters article [1] WYPF was quoted as saying that that they would have lost money had they sold out of oil and gas stocks in the last few years. This claim conflicts with evidence to show that fossil fuel divestment would protect pensions from financial losses [2]. The group will be asking its supporters to write to the WYPF to publish their analysis which led to this statement.

Chayley Collis from Fossil Free West Yorkshire said: “We believe that the claim that fossil fuel divestment could hurt, rather than protect investment performance is based on a biased and incomplete financial analysis, reflects a poor understanding of the financial performance of the fossil fuel industry and may represent a breach of pension managers’ fiduciary duties to their pension holders.”

Chayley added: “West Yorkshire Councils, including Leeds, Bradford, Wakefield, Kirklees and Calderdale, have recently declared a climate emergency. We are seeing the effects of climate breakdown in extreme weather events across the world – from the fires in Australia to the flooding in Indonesia and fires and floods even closer to home. Our councils need to stop fanning the flames of the climate crisis by ditching their fossil fuel investments.”

 

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References:

1. https://www.reuters.com/article/us-britain-pensions-divestment/british-pension-schemes-warn-on-cost-of-fossil-fuel-divestment-idUSKBN1ZJ1EK

2. Examining the financial implications of fossil fuel divestment , Friends of the Earth January 2020

‘Burning money’

 

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Demonstration at Bradford City Hall, highlighting West Yorkshire Pension Fund’s investments in fossil fuels

83679547_271011107212439_5132882417215864832_nFossil Free West Yorkshire held a demonstration outside Bradford City Hall on Thursday 30 January 2020  before a meeting of the West Yorkshire Pension Fund’s Joint Advisory Group. The group were highlighting the role of fossil fuel investments in fuelling the climate crisis as well as the financial threat to the pension fund of continued investment in fossil fuels. The protestors were symbolically ‘burning money’ as part of the demonstration.

The West Yorkshire Pension Fund’s Joint Advisory Group (JAG) is made up of councillors from across West Yorkshire as well as Union and pension-holder representatives. The campaigners plan to highlight the financial and ethical implications of issues of the Fund’s  £933 million fossil fuel investments as members of the JAG come into to City Hall to attend the meeting.

83598669_3246343122047450_6992970209799700480_nPaul McHugh from Fossil Free West Yorkshire said “I am a member of the West Yorkshire Pension Fund and I’m increasingly concerned that the Fund is not paying attention to the financial risks of investing in fossil fuels. Mark Carney, recent Governor of the Bank of England, has repeatedly warned that the assets of fossil fuel companies may soon become stranded assets as the world moves towards climate-friendly forms of energy. The costs of renewable energy are coming down rapidly and analysts are predicting that fossil fuel demand could peak in the 2020s. The WYPF’s current policy of engaging with the fossil fuel companies is not going to protect our pensions”.

83513863_618911278873347_5471332505929908224_nChayley Collis from Fossil Free Yorkshire said: “This year the threat of the climate crisis has been very clear, demonstrated by the recent devastating flooding in Indonesia and fires in Australia. It is not acceptable that our local councils are fanning the flames of the crisis with their continued investments in oil and gas companies. By switching investments from fossil fuels the pension fund would also be protecting itself from the financial risk of stranded assets and could even increase financial returns.  For example, fossil free versions of the FTSE have outperformed standard FTSE indexes (with fossil fuels) over the last 5 years.”

Councillor Andrew Scopes, a representative on the WYPF Joint Advisory Group for Leeds City Council, commented: I’m convinced by the moral and financial argument that the time has come to disinvest from fossil fuel companies.”

Councillor Scopes is among a growing number of West Yorkshire councillors calling for the pension fund to divest from fossil fuels, including 25 Bradford councillors and 26 councillors from across West Yorkshire. Nine MPs from across West Yorkshire, including:  Hilary Benn, MP for Leeds Central;  Imran Hussain, MP for Bradford East; Naz Shah, MP for Bradford West;  and Barry Sheerman, MP for Huddersfield, are also lending their support to the calls for divestment.

Fossil Free West Yorkshire are also currently collecting signatures for a petition calling for the pension fund to drop its fossil fuel investments, which will be handed in to Bradford Council in March 2020.

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More information

Trade unionists, Labour activists and pension holders challenge West Yorkshire Pension Fund at AGM

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Labour grassroots campaigners and trade unionists from across West Yorkshire joined climate campaigners from Fossil Free West Yorkshire at the WYPF AGM in Bradford (6 November). The protesters were calling for the fund to stop investing in coal, oil and gas companies.

The protest was organised by Leeds Trades Union Council, Leeds and Bradford Momentum, and supported by Labour councillors from Leeds, Calderdale, Bradford and Kirklees. Many of those attending the protest were pension holders with the WYPF. Eleven West Yorkshire MPs are also joining the call for the Pension to divest, including Mary Creagh, Hilary Benn, Naz Shah and Imran Hussain.

Andrew Scopes, Councillor for Leeds City Council, said:

”The WYPF needs to protect its funds from the potential financial crash caused by the impending ‘carbon bubble’ which financial analysts say will occur when fossil fuel demand peaks. Looking at the performance of financial markets non-fossil fuel funds can be seen to be performing at least as well as fossil fuel funds, which suggests that moving money from fossil fuels now will not adversely affect performance of the pension fund”

Sue Coatman from Leeds Momentum, one of the protest organisers said:

“We are calling on WYPF to divest from fossil fuels. The West Yorkshire Pension Fund is heavily invested in fossil fuel companies, with 3 of its top 5 investments in oil and gas companies. Fossil fuel companies are driving us towards climate breakdown. They use their money, power and influence to block every serious attempt to prevent a climate catastrophe. And our money helps them to do this. The WYPF must divest and publicly break their ties, for all our sakes.”

Richard Murgatroyd, Councillor with Kirklees Council said:

“A number of drivers, including legislation and technological developments, mean that fossil fuel demand could peak in the early 2020s. The Governor of the Bank of England Mark Carney has been warning us about the threat of stranded assets in fossil fuels, because the vast majority of fossil fuel reserves will be ‘unburnable’.”

 

Notes

 

*Source:  Carbon Tracker: 2020 Vision September 2018 https://www.carbontracker.org/reports/2020-vision-why-you-should-see-the-fossil-fuel-peak-coming/

Rachel Reeves MP calls for Pension Funds to drop fossil fuels as climate action

Rachel Reeves, MP. 

20/7/2017

Rachel Reeves MP calls for action on the climate crisis as she joins 8 Labour West Yorkshire MPs calling on West Yorkshire Pension Fund to divest from fossil fuels, as well as a cross-party group of over 200 current and former MPs that has called on the Parliamentary Pension Fund to phase out its substantial investment in fossil fuel giants such as Shell and BP, following growing concerns about climate breakdown.

Rachel Reeves has pledged her support for Fossil Free West Yorkshire [1], a campaign demanding that local councils stop funding the climate crisis via their pension fund by divesting from fossil fuels, the burning of which cause climate change. She has also signed the Divest Parliament Pledge, which calls on the Parliamentary Pension Fund to review and phase out investments in fossil fuel companies [2]. The call follows growing concern among constituents about the environmental, social and financial risks posed by climate change.

Rachel Reeves, MP said: “Climate scientists have repeatedly warned that urgent political action must be taken to reduce carbon pollution from burning fossil fuels. This is why I support both Fossil Free West Yorkshire and the Divest Parliament campaigns to move investments of the pension funds away from fossil fuels and towards renewable technologies. I agree with many of my constituents: it doesn’t make sense for long-term pension funds to be investing in companies that aren’t committed to bringing about a clean energy future.”

Simon Campbell Skelling, one of her constituents who met Rachel Reeves to ask her to take action said: “The climate science is unequivocal: the vast majority of fossil fuels must stay in the ground to contain warming below 1.5 degrees. It is unacceptable for political leaders to be heavily investing in fossil fuels at a time of climate breakdown and I am very pleased Rachel Reeves agrees. We must invest in a world powered by clean energy – this will tackle climate change, create jobs and improve our health. We are delighted with the support from so many local MPs on this issue and would love to see Leeds council take action consistent with their claim that they are concerned about climate. Leeds council cannot say they are taking action on climate while at the same time paying the very companies who are driving climate breakdown.”     

If successful, these campaigns would see West Yorkshire Pension Fund and the Parliamentary pension fund joining the Irish National Infrastructure Fund, the New York State Pension fund, local authorities such as Waltham Forest and Southwark and two thirds of UK universities in committing to fossil fuel divestment [3].

 

END

______________

 

[1] https://fossilfreewypf.wordpress.com/

 

[2] Pledge text available here and full list of supportive MPs available here. The campaign asks the Pension Fund to ‘quantify, review and disclose its investments in carbon-intensive industries, engage in a dialogue with fund members and publicly commit to phasing out fossil fuel investments over an appropriate time-scale.’

 

[3] To date, over 1000 institutions across the globe – representing funds worth over $8 trillion – have made some form of divestment commitment. Full list of commitments available here.

Mary Creagh MP challenges West Yorkshire Pension Fund’s investment in fossil fuels

As campaigners from Extinction Rebellion call for meaningful action on climate across the world in London this week, and the heads of two major central banks have written a stark warning about the financial risks to the global economy of climate change, Mary Creagh, MP for Wakefield and chair of the parliamentary Environmental Audit Committee, has added her voice to those calling on the West Yorkshire Pension Fund to drop investments in oil, coal and gas companies such as Shell and BP owing to concerns about climate change.

The campaign has also been supported by 7 other West Yorkshire MPs: Alex Sobel and Hilary Benn from Leeds, Imran Hussain and Naz Shah from Bradford, Thelma Walker and Barry Sheerman from Kirklees, and Paula Sherriff from Dewsbury.

Mary Creagh joined the campaign after she was contacted by her constituent Yvonne Sibbald who expressed her concern about the increase in extreme weather across the globe because of climate change, and the massive loss of life, increase in migration and conflict that would result globally.

Yvonne commented: ‘We are delighted that Mary supports the campaign for West Yorkshire Pension Fund to divest from dirty fossil fuel companies which are causing the climate crisis we are in. There is still time to act, and with Mary’s support the campaign is stronger to protect members’ pensions, employer contributions and climate.’

Mary Creagh said, ‘

“We must alter course to avoid climate catastrophe and ensure our children are valued, nature is valued and our planet is healthy enough to support generations to come.

As young people march for meaningful action to support our environment, and councils as well as the Labour party declare ‘climate emergencies’, I am optimistic that we are beginning to acknowledge the need for change.

But we have a very small window in which to act. We must get serious about tackling this climate crisis and divesting from dirty fuels is an important step. I support Fossil Free West Yorkshire in working towards this aim.”

Chayley Collis from Fossil Free West Yorkshire added: “Across the energy industry investment is shifting from fossil fuels to clean technologies. It’s clear that fossil fuels will soon be history and so the smart thing to do, not just for our climate, but financially is to embrace the change and invest in the technologies that will be an important part of our future. Local government can lead the way by moving to an economy that puts people and our shared home first. We welcome Mary Creagh’s support, especially with her expertise on the environment and good reputation in the House of Commons “

 

The Fossil Free campaigners argue that investments in fossil fuel companies such as BP, Shell and Total are not compatible with the UK government’s commitment under the Paris Agreement to keep global warming well below 2oC. This is based on research that says that to keep to the Paris Agreement most known fossil fuel reserves need to be left in the ground.

‘ZOMBIES’ MARCH THROUGH LEEDS TO HIGHLIGHT DANGERS OF GAS, OIL AND COAL

Dead against Fossil Fuels zombie slouch, Leeds

A  Hallowe’en themed march for climate action took place in Leeds today [Saturday 27th October]. Marchers took to the streets dressed as zombies, proclaiming that they were ‘dead against’ fossil fuels. The marchers were protesting against the fossil fuel and fracking industries and were calling on Leeds Council, West Yorkshire Pension Fund, Leeds University and Leeds MPs to end their investments in fossil fuel companies.

The fossil fuel industry is the leading cause of climate change, with just 100 companies responsible for 71% of global emissions [1]. The marchers included parents, pensioners, students and several young children in buggies. It was organised by Friends of the Earth, Fossil Free West Yorkshire and ‘Dead Against’.

Dead against Fossil Fuels zombie slouch, Leeds

Deirdre Duff of Friends of the Earth said;

“The fossil fuel industry has five times more fossil fuels than we can use if are to prevent catastrophic, irreversible climate change. Despite this, the fossil fuel industry continues to explore for even more fossil fuels. Its business plans are incompatible with retaining a planet that is safe for human civilization”

Chayley Collis of Huddersfield Friends of the Earth said;

“The fossil fuel industry spends huge sums of money lobbying politicians and policy makers to promote climate misinformation – such as the myth that natural gas is a solution to climate change. In reality, we cannot afford to start any new gas, oil or coal projects if are serious about our commitment to the Paris Climate Agreement.  It is shocking that the West Yorkshire Pension Fund continues to invest in such a dishonest and dangerous industry. It is time to divest.”

Jane Thewlis, of Fossil Free West Yorkshire, said;

“I’m marching today for a fossil free world. It’s exciting that the price of renewables has dropped dramatically over the last decade. A renewable powered world can be a safer, cleaner, more equitable world. It’s time to make fossil fuels history – it makes neither ethical nor financial sense to invest in them today.”

Madeleine Vos, an MSc Sustainability and Business student at Leeds University said;

‘We are marching because the University of Leeds is still ignoring student voices calling for fossil fuel divestment. They still invest over three million pounds a year directly into fossil fuel industries, despite knowing the imminent dangers of climate change”

The fossil fuel divestment movement is growing rapidly. Institutions managing over 7 trillion dollars’ worth of investments have now committed to divest from fossil fuels. Local government pension funds, cities such as New York, universities, health organisations, churches and the country of Ireland are among those ending their investments in fossil fuels [2]

However West Yorkshire councils, such as Leeds and Bradford council, continue to invest in the fossil fuel industry through the West Yorkshire Pension Fund (WYPF). WYPF has £933 million invested in fossil fuel companies [3], including considerable exposure to companies involved in the global fracking industry [4]. West Yorkshire MPs, through their MP pension fund, are investing in fossil fuel companies such as Shell, BP and Total [5]. A number of West Yorkshire MPs have signed a Divest Parliament Pledge to the support the campaign for divestment of the MP pension fund.  Leeds university has over £3.5 million invested in the fossil fuel industry. It is expected to make a decision on whether to divest from fossil fuels this November.

Dead against Fossil Fuels zombie slouch, Leeds

ENDS

NOTES

[1] See https://www.theguardian.com/sustainable-business/2017/jul/10/100-fossil-fuel-companies-investors-responsible-71-global-emissions-cdp-study-climate-change

[2] For details of fossil fuel divestment commitments see https://gofossilfree.org/divestment/commitments/

[3] See https://gofossilfree.org/uk/wp-content/uploads/sites/3/2017/11/Councils-Fuelling-the-Fire-Online-1.3.pdf

[4] West Yorkshire Pension Fund invests at least £513,639,500 in companies with fracking operations – as revealed in this report 513,639,500. https://gofossilfree.org/uk/wp-content/uploads/sites/3/2018/09/03_09_18_FINAL-VERSION-divest-fracking-report-.pdf

[5] The MP pension fund has stakes in the fossil fuel companies BP (£ 7.33 million), Royal Dutch Shell (£6.6 million), Rio Tinto (£3.67 million) and Total SA (£2.93 million). For more information on this see https://gofossilfree.org/uk/divest-parliament/