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Thursday, March 28, 2024

Highland Council Pension Invests Over £46 Million in Fossil Fuel Polluters

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A new report has revealed that the Highland Council pension fund has £46 million invested in climate-polluting fossil fuel companies.

This is despite Highland Council declaring a climate and ecological emergency in May 2019 and committing to achieve a carbon neutral region by 2025.

The report by Friends of the Earth Scotland, Platform and Friends of the Earth England, Wales and Northern Ireland found that overall in Scotland, £1.2 billion was invested in fossil fuel companies by council pension funds.

The Highland Council pension fund administers the pensions of over 32,000 members including on behalf of Comhairle nan Eilean Siar (Western Isles Council).

None of the 20 Scottish councils that have declared a climate emergency have taken action to end their investments in the coal, oil and gas firms chiefly responsible for driving this crisis.

Councillors on 11 local authorities oversee management of the fund schemes.

As fossil fuel company stocks have fallen in value in recent years, local councils have lost out.

£194 million of value was wiped off the oil and gas investments of the Scottish council pensions between 2017-20 with the Strathclyde Pension Fund losing £46 million and the Highland Council Pension Fund losing £11.65 million.

Local residents and campaigners are calling on the Highland Council Pension Fund to tackle the climate emergency by divesting from fossil fuels ahead of the UN Climate Conference COP26.

Kate, from Lochaber Environmental Group, said:

“We are facing a climate and ecological emergency and hurtling towards the breakdown of the support systems we rely on for life.

“This has not happened by accident, we have known the science and the solutions for decades.

“By continuing to invest in fossil fuels, our local councils are supporting the companies which are most responsible for making the climate crisis worse.

“Young people deserve the chance to build a better future on a liveable planet and this will only be possible if we stop burning fossil fuels, restore our precious forest and peatland ecosystems and invest in renewable alternatives like wind and solar power.

“With COP26 coming to Scotland, the Highland Council Pension Fund has a vital opportunity to lead the way by divesting from fossil fuels and reinvesting in a Just Transition to renewable energy which can help avoid the worst effects of the climate crisis, protect our threatened wildlife habitats and provide green jobs in renewable energy.”

The Highland Fund was found to hold direct fossil fuel investments in oil giant BP.

UK-based BP is one of the world’s biggest fossil fuel producers and is continuing to explore for new oil and gas, including in Scottish waters.

BP is also a financial backer of the proposed gas export scheme in Mozambique which has been associated with increased militarisation and violence in the region, and led to the displacement of local communities.

The pension fund also invests in the mining company, BHP.

Based in the UK and Australia, BHP is the part owner with Anglo American and Glencore of the Cerrejon open-pit mine in Colombia.

It has been reported that the companies are under investigation by the Organisation for Economic Co-operation and Development (OECD) for environmental and human rights abuses” at the Cerrejon coal mine.

Strathclyde Pension Fund was the worst offender in Scotland after being found to have £508 million invested in companies such as Shell, BP and Exxon.

This is despite Glasgow hosting the UN climate conference later this year and Councillors declaring a climate emergency in May 2019.

Across the UK, total fossil fuel investments in the pension funds stood at £9.9 billion – an average of £1,450 per scheme member.

Over half of Scotland’s universities have committed to divest from fossil fuel companies, including Edinburgh, Stirling and Dundee Universities, alongside local government funds in Southwark, Islington, Lambeth, Waltham Forest, and Cardiff.

Ric Lander, Divestment Campaigner at Friends of the Earth Scotland, commented:

“Many local authorities have declared a climate emergency and have plans in place to bring down emissions from transport, buildings and waste.

“Pension fund investments are currently working against this progress by continuing to back the ageing fossil fuel economy.

“Local councillors have the opportunity to show leadership on climate action by telling fund managers to divest from fossil fuels.

“Local authorities have the power and duty to ensure local workers have a pension for their retirement, but also a future worth retiring into.

“Instead of stubbornly sticking with old systems of investment that worsen climate breakdown, councils should boost investment in renewable energy and social housing.”

Stephen Smellie is Deputy Convenor of UNISON Scotland, who are the largest union representing local government pension fund members.

He commented:

“It is disappointing that the people who manage the pension funds of local government workers are oblivious to the climate crisis that is facing us.

“Workers care deeply about a sustainable future for their children, and if pension funds consulted with the people whose money they are investing they would know that.

“Instead, they continue to be part of the climate crisis problem rather than being part of the solution that they could be if they increased investments in sustainable alternatives.

“The value of the fossil fuel investments is high but only a small percentage of the funds’ overall investments so there is no financial justification for maintaining investments in coal, fracking or further fossil fuel exploitation.”

“There is a moral and ethical case for divesting from polluting fossil fuels.

“But there is also a firm financial case to remove workers’ pension funds from investments that will lose value as the world moves to a low-carbon economy which is less dependent on fossil fuels.”

Breakdown of investments by local authority pension fund

Local authority pension fund / Fund value (GBP) / Fossil fuel value (GBP) / Fossil fuel (%)

Dumfries and Galloway / 825,599,848 / 31,165,479 / 3.8%

Falkirk / 2,298,923,603 / 97,263,363 / 4.2%

Fife / 2,427,493,675 / 70,102,646 / 2.9%

Highland / 2,114,889,081 / 46,148,656 / 2.2%

Lothian / 7,442,687,000 / 164,691,111 / 2.2%

North East Scotland / 4,404,702,477 / 124,457,073 / 2.8%

Orkney Isles / 450,562,319 / 9,303,106 / 2.1%

Scottish Borders / 716,173,265 / 15,851,755 / 2.2%

Shetland Isles / 459,300,000 / 19,679,134 / 4.3%

Strathclyde / 22,702,413,180 / 508,463,509 / 2.2%

Tayside / 4,013,372,242 / 117,695,060 / 2.9%

Total value of Scottish Local Government Pension Scheme £47,856,116,690

Total fossil fuel value of Scottish funds £1,204,820,892

Average Scottish fossil fuel investment 2.5%

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