Members of West Yorkshire Pension Fund demand more information about financial risks of climate change

Members of the West Yorkshire Pension Fund (WYPF) have written to the fund to express concern that it is not providing enough information about how it manages the financial risks associated with climate change, including from investments in fossil fuel companies.

WYPF invests £671 million of its £11 billion total assets in fossil fuel companies, and a group of members wrote to the fund in March, expressing concern about risks to investments in such companies. Now, members are once again lobbying the fund, concerned that it has not provided enough information in its response. 26 members have added their names to the latest letter to the fund. They are from across West Yorkshire, including Bradford, Calderdale, Kirklees and Leeds.

WYPF Members meeting with ShareAction July 2016: Peter Taylor, Lesley Hall, James Brass, Jane Thewlis, Jess Clark (from ShareAction) and Sam Saxby.
WYPF Members meeting with ShareAction July 2016: Peter Taylor, Lesley Hall, James Brass, Jane Thewlis, Jess Clark (from ShareAction) and Sam Saxby.

The letter says, “Whilst it is apparent … that the fund is taking some positive steps towards assessing and addressing climate risk, we nevertheless feel that not all of the questions we asked in our letter have been answered.”
The letter requests that the fund assesses the financial risks that climate change could pose to its portfolio. It says the fund could follow the lead taken by the South Yorkshire Pensions Authority, which recently took the decision to engage a specialist contractor to conduct a carbon audit of its portfolio.

The campaign to raise awareness of the scheme’s investments in fossil fuels began last September. Members believe it does not make sense to invest pensions in fossil fuels which are causing climate change, which if unchecked will cause massive problems worldwide and well into the future.
There have also been numerous warnings from the financial community that investments in high-carbon industries will prove financially risky in the future, as regulation limits the amount of carbon that can be burned. Mark Carney, Governor of the Bank of England, said that investors face “potentially huge” losses from climate change action that could make vast reserves of oil, coal and gas “literally unburnable”.

Members have been supported by responsible investment charity ShareAction, which helps pension savers get into a dialogue with their pension funds about such issues, and environmental law firm ClientEarth.

Mark Gladwin, 70, from York, who is an ex-employee of Bradford Council, said:
“As a grandad, I don’t want my pension savings financing activities which will lead towards a poorer, more dangerous world for my grandchildren to grow up in.”

Sam Saxby, 37, said:
“I live in Calderdale, a beautiful place which is at risk of flooding – risks made worse by climate change. WYPF invests heavily in companies who extract and sell the very fuels which cause climate change. It’s wrong that my pension is supporting an industry which is so damaging. As China and the US have ratified the Paris carbon reduction targets, it’s clearer than ever that fossil fuels are yesterday’s news.We should be investing in the clean technology of tomorrow, not the tail-end of the poisonous petroleum bubble.”

Bradford MP joins calls for Pension Fund to go Fossil Free

Naz Shah MPBradford West MP, Naz Shah, has signed a petition urging the West Yorkshire Pension Fund to cut its fossil fuel investments. The Labour MP has signed the Fossil Free WYPF petition and has also spoken in favour of the campaign in a debate in Parliament on Tuesday 11 March.

Naz Shah MP said: “Communities around the world, including West Yorkshire, are already suffering the effects of climate change. We need to stand on the right side of history and act against this urgent threat. If WYPF is serious about securing a prosperous future for pension scheme members, it must stop funding climate chaos and remove the pension fund’s exposure to fossil fuel investments.”

The Fossil Free WYPF group is campaigning for the WYPF to freeze its investments in fossil fuels and then carry out a managed programme of divestment over a five year period.

Jane Thewlis, Bradford resident and WYPF member said ‘’We are delighted that Naz Shah has shown the vision and leadership to take a stand against funding climate change, in order to protect her constituents who are council tax payers and some of whom are members of the pension fund. There are strong financial and ethical arguments for divestment, based on the research by Carbon Tracker that up to 80% of known fossil fuel reserves need to stay in the ground to comply with the climate targets set by the world’s governments at COP21 in Paris last year. Investors are also being increasingly warned of the risk of ‘stranded assets’ with fossil fuel investments. We are proud to have an MP who can understand the terrible risks involved and take action.”

Jane Thewlis added: “WYPF could now begin to divest from fossil fuels to encourage the necessary rapid transition to a carbon neutral economy. Money released by phased divestment could be diverted to local renewable energy and energy conservation investments, creating local jobs and keeping money from the fund in the West Yorkshire economy.”

Fossil Free WYPF are encouraging local residents to support their campaign by signing an online email for members and petition for residents: act.350.org/letter/divest-wypf/

 

 

New report on West Yorkshire Pension Fund & fossil fuel divestment

Fossil Free WYPF has recently issued a report to support councillors and WYPF committees currently reviewing their fossil fuel investments.

FOE fossil fuels infographics CASH_CS6On 20.10.15 Bradford Council voted to review the fossil fuel investments of the West Yorkshire Pension Fund, following a motion requesting the WYPF divest from fossil fuels. A joint review was requested to be carried out by the Corporate Overview and Scrutiny committee and Governance and Audit committee, to report back to full council in 6 months.

The Fossil Free WYPF report defines fossil fuel divestment, and summarises the main reasons for divestment: both environmental and financial. It addresses the concerns raised by the West Yorkshire Pension Fund about divestment, and provides examples of other local authority pension funds who have divested from fossil fuels.

Download report here

Councils told to “Clean Up Your Pension Fund”

Fossil Free WYPF LeedsFriends of the Earth campaigners from across Yorkshire called on the West Yorkshire Pension Fund to ditch investments in fossil fuels.  This was the message of a demonstration held on the steps of Leeds Civic Hall Saturday 19th March 2016.

 The West Yorkshire Pension Fund has over £670m tied up in dirty fossil fuels including investments in BP and Shell.

Friends of the Earth supports Fossil Free West Yorkshire Pension Fund which is calling for the pension fund to divest from fossil fuels and increase investment in lower risk and low carbon projects, ideally renewable energy and energy efficiency.

Research from Carbon Tracker has shown that, in order to meet international commitments to tackling climate change, up to 80% of known fossil fuel reserves need to be kept in the ground, increasing the investment risk of fossil fuels.

Jane Thewlis, from Fossil Free WYPF, said:

“After the Boxing Day floods which brought the impacts of climate change to the doorsteps of so many people in West Yorkshire, the Pension Fund needs to stop financing dirty fossil fuels and invest in clean energy solutions instead.”

Clean up the West Yorkshire Pension Fund!

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Campaigners from across the region converged outside West Yorkshire Pension Fund (WYPF) offices on Saturday 13 February to call on the local authority pension fund to learn the lessons from the recent floods and redirect investments away from the fossil fuels that cause climate change. The Fossil Free WYPF group were dressed as cleaners, with mops, dusters and brooms, with the message ‘Clean up the West Yorkshire Pension Fund: stop investing in fossil fuels’ and were joined by Bradford councillors Kevin Warnes, Richard Dunbar and Sue Duffy.

The Fossil Free WYPF group believes that the terrible flooding that hit parts of West Yorkshire and other areas on Boxing day, highlights the urgent need for divestment from fossil fuels. Burning fossil fuels creates the global warming that is changing our climate. Expert opinion is that climate change makes such extreme weather more likely.

The West Yorkshire Pension Fund (WYPF) has a legal responsibility to invest wisely on behalf of its members who work for local councils and other organisations. This means securing ‘the best realistic return over the long term, given the need to control for risks’. (1) The Fossil Free WYPF group point out that Mark Carney, Governor of the Bank of England, has warned recently, the potential losses from falling share prices for fossil fuel companies were ‘potentially huge’ as their reserves of coal, oil and gas become ’stranded’ as they cannot be burned if the world is to tackle climate change. (2)

Councillor Warnes commented “The hundreds of people across West Yorkshire who were affected by the recent flooding must be wondering why the West Yorkshire Pension Fund has over £671 million invested in coal, oil and gas companies”.

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Jane Thewlis, Bradford resident and WYPF member added “If WYPF is serious about securing a prosperous future for pension scheme members, it must divest from companies like Shell and BP, whose products are making climate change worse and flooding more likely.”

WYPF could now begin to divest from fossil fuels to encourage the necessary rapid transition to a carbon neutral economy. Money released by phased divestment could be diverted to local renewable energy and energy conservation investments, creating local jobs and keeping money from the fund in the West Yorkshire economy

The Fossil Free WYPF group  is campaigning for the WYPF to freeze its investments in fossil fuels and then carry out a managed programme of divestment over a five year period. (3)

Fossil Free WYPF are encouraging local residents to support their campaign by signing an online email for members and petition for residents: http://act.350.org/letter/divest-wypf/

The action was one of over 50 similar events happening across the country for Global Divestment Day.

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Notes

(1) Law Commission, 1 July 2014, Is it always about the money?  Pension Trustees’ duties when setting an investment strategy: guidance from the Law Commission www.lawcom.gov.uk/wp-content/uploads/2015/03/lc350_fiduciary_duties_guidance.pdf

(2) Mark Carney warns investors face ‘huge’ climate change losses, Financial Times 29.9.15

(3) Fossil Free West Yorkshire Pension Fund is part of the Fossil Free UK grassroots network, which itself is part of a growing international movement calling on institutions to divest (sell their shares) from fossil fuels to take action against climate change. http://gofossilfree.org/uk/about-fossil-free/

Calderdale Council to investigate fossil fuel divestment

Following a request from Calderdale Friends of the Earth,  the Leader of Calderdale Council, Councillor Tim Swift, has agreed to consider the case for divesting funds invested in fossil fuels. This follows a decision by neighbouring Kirklees Council to look at fossil free divestment.

Councillor Swift said: “I have considered the motion approved by Kirklees Council and I am prepared to ask the Head of Finance to undertake reviews of our policies in respect of investment in fossil fuels.”  The council’s current strategy for investing its own funds already excludes such investment, he said. “The Council does not therefore directly invest in fossil fuel industries but I will ask the Head of Finance to consider this issue explicitly within the next review.”

With regard to investments made by West Yorkshire Pension Fund (where the WYPF has 6.5% of its £11 billion pension fund invested in fossil fuels; at £671 million the third largest fossil fuel holdings of all UK local authority pension funds) Councillor Swift said that “the Council’s representative on the WYPF investment panel is prepared to raise the issue of its investment in fossil fuels.” He added that the Pension Fund is already looking into investments in renewable energy technologies.

Anthony Rae, coordinator of Calderdale Friends of the Eath said: ‘We welcome this positive response from our council, demonstrating that in the run-up to the critical climate change negotiations in Paris in December they recognise that they can do their bit to support the push for massively urgent carbon reduction. We pointed out that they would better protect the value of the investments needed for the long-term security of pensions by divesting from dirty fuels like coal at an early date and reinvesting instead in other areas with a more assured future and with a good rate of return. For example, investment in the energy efficiency of our housing stock should meet those criteria as well as providing many other benefits.”

Notes:

For information on UK local authority pension fund investment in fossil fuels: http://gofossilfree.org/uk/pensions/

Investments of WYPF are listed here: www.wypf.org.uk/Member/Investments/InvestmentPortfolio/2015/WYPFValuation2015.aspx

Halifax Courier article: www.halifaxcourier.co.uk/news/670-million-of-bad-investment-for-councils-1-7517758