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.
- See Friends of the Earth briefing paper – link in Notes for Editors below
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:
We call upon the West Yorkshire Pension Fund to:
Make a public divestment statement committing the West Yorkshire Pension Fund to:
- Immediately freeze any new investment in the top 200 publicly-traded fossil fuel companies with largest known carbon reserves (oil, coal and gas)
- 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
- Advocate to other pension funds, including members of the the Local Authority Pension Fund Forum and Local Government Pension Scheme to do the same
- 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