Pension fund to divest millions tied up in fossil fuel companies

MILLIONS of pounds invested in fossil fuel companies are set to be withdrawn by Cardiff and Vale Pension Fund.

Cardiff council has called on the fund to divest the money it has tied up with oil and gas companies linked to fossil fuel extraction.

An estimated £110m has been invested by the pension fund into the oil and gas sector into companies such as BP and Shell, many of which are linked with fossil fuel extraction.

And the councillor at the head of the pension fund says it would be possible to withdraw the investments in fossil fuel companies within the next five years.

It was estimated last year that Cardiff and Vale Pension Fund had invested £45m in companies linked to fracking.

Cardiff council, the biggest employer in the pension fund, backed a motion on July 18 to call on the fund to withdraw investments from companies involved in fossil fuel extraction within the next five years.

Bleddyn Lake, spokesman for Friends of the Earth Cymru, said it’s “fantastic” to see Cardiff councillors vow to stop supporting fossil fuel companies.

He said: “Now it’s time for all the local authority pension funds in Wales to follow Cardiff’s lead. Too many have been hiding away from taking meaningful action, preferring to hide behind so-called ‘engagement’ with these companies, but if a climate emergency is to mean anything then we simply cannot afford to be investing money in the very companies which are driving climate change.

“Research has shown that divesting from fossil fuel companies is actually better financially too, and will minimise future financial risks for those with pensions in these funds.

“Climate change is the challenge of our age. We can’t afford to push action further down the road all the time or expect others to be the ones to sort out this mess.”

The motion also called on Cardiff and Vale Pension Fund to transfer about £200m into low-carbon investment funds.

There are about 40 employers involved in the pension fund, with Cardiff and Vale of Glamorgan councils being the biggest.

The UN has warned there are only 11 years left to prevent irreversible damage from climate change, and has called for the end of taxpayers’ subsidies for fossil fuels.

Councillor Ed Stubbs, who proposed the motion, said it is important to convince other employers in the fund to disinvest from fossil fuel companies.

He said: “When you know you’re in such a stark situation and the dangers are real, this is obviously the right thing to do. The climate emergency has to be something we look at in everything we do.”

The pensions committee, which controls the fund, supported the principle of divesting from fossil fuel companies earlier this year.

Councillor Chris Weaver, chairman of the committee, said it will take very seriously its legal obligation to keep paying people’s pensions.

He said: “I think it is achievable – it’s what we’re working towards. As a pensions committee every decision we make will be based on the evidence in front of us at the time.

“As the evidence continues to stack up about the risks of climate chaos this will become ever higher on everyone’s agenda.”