The quick answer to the question will the Bedfordshire Pension Fund divest away from fossil fuels is “no”.
Retired Leighton Buzzard resident, Christine Sheppard, who was “kind of” representing Divest UK, asked Bedfordshire Pension Fund Committee (Tuesday 21 June) if it would divest its funds.
“My question is to ask you as a pension fund to commit to disinvest what I understand is between £38 and £40 million of pension funds invested in fossil fuel industries; coal, oil, gas, and instead to transfer those funds to fast-growing renewable energy companies,” she said.
Committee chair, councillor Doug McMurdo (Bedford Borough Council) replied: “Thank you very much for your question, I will answer it, and the answer’s no.”
“We look at this very, very seriously, and we take a very strong position in investing responsibly,” he expanded.
“That cuts across the three strands; environmental, social, and governance issues,” he said.
“The pension fund invests, if my mind serves me correctly, about £1.4 – 1.5 billion in passive investment, so we track an index.
“This committee took a decision many, many, months ago and we moved it from the traditional index-tracking passive investment vehicles to, and I quote, the Black Rock Low Carbon Fund, which is a screening bond and the LGIM, that’s the Legal and General Investment Management to their future world index funds,” he said.
The BlackRock website said its fund applies nine baseline screens to a managed fund where the investment manager will seek to limit and/or exclude direct investment in certain sectors.
These screens include issuers deriving more than “five per cent of their revenue from thermal coal extraction and/or thermal coal-based power generation, with the exception of “green bonds”, that are considered to comply with the International Capital Markets Association’s Green Bond Principles (GBP)”.
The International Capital Markets Association website said GBP-aligned issuance should “provide transparent green credentials alongside an investment opportunity”.
“So that’s just a couple of examples of what we are doing here at Bedfordshire,” councillor McMurdo said.
“Be absolutely certain we are in this pension fund, which is just shy of three billion pounds and 70,000 members, we are taking this very, very seriously.
“Not just climate, but all other aspects of investing responsibly,” he said.
In response, Ms Sheppard said: “We don’t really have time to hang about with this.
“There’s two big reasons why it’s so important, the first of course, is the existential threat.
“Two scientists only this last weekend were reporting on heat waves in the North and the South Pole saying quote ‘we are now looking at a climate catastrophe’.
“The second is a financial one, and the impact on returns from investments.
“The markets generally are aware that fossil fuels are in danger of being stranded assets.
“That means you won’t get so good a return on your investments as you would if you invested in fast-growing green technologies.
“The International Energy Agency said no new investment must happen anywhere in any new coal, gas or oil projects if we are to stay below 1.5 degrees centigrade.
“So the writing is on the wall,” she said.
by John Guinn
Local Democracy Reporter