Freedom of Information requests by climate change activists found local authority pension funds have £9.9 billion invested in fossil fuel companies. The campaigners say investment in the polluting energy sources continues despite more than three-quarters of local councils declaring a climate emergency.
The analysis from Platform, Friends of the Earth and Friends of the Earth Scotland is based on the end of the 2019/2020 financial year.
It uses a list of the world’s 200 biggest extractors of fossil fuels to examine the direct investment in oil, coal and gas companies, and indirectly through investment funds that put pension money into the sector.
According to the analysis, which the campaign groups say is likely to be an underestimate because it only focuses on the 200 biggest companies, fossil fuels represent 3 percent of the Local Government Pension Scheme, with coal accounting for £3.4 billion and oil and gas making up £6.5 billion.
Almost three-quarters of the investment (72 percent) takes place indirectly through investment funds, according to a report by the groups.
Rianna Gargiulo, divestment campaigner at Friends of the Earth, said: “Declaring a climate emergency may garner good headlines but too often it seems to stop there.
“Councils can’t make a bold claim about saving the planet while continuing to invest in fossil fuels.
“Local authorities have the power and duty to ensure local workers not only have a pension for their retirement, but also a future worth retiring into. “
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She urged councils to invest in renewable energy and social housing insisting they benefit communities and households.
Robert Noyes, campaigner and researcher at Platform and report author, said: “After a decade of austerity and the devastating economic impact of Covid across the UK, local councils can and should be using their pension funds to support local investment priorities.
“Instead of making risky bets on fossil fuels, let’s channel the wealth in our pensions to local communities and build a better world beyond the pandemic.
“Whatever your stake in your pension – imagine what world you want to retire into – and push your pension to invest in it.”
There is also pressure on the UK to set out ambitious action to tackle the climate crisis as hosts of the United Nations Cop26 summit which was delayed by the pandemic and is now taking place in Glasgow in November.
Business and Energy Secretary and COP26 President Alok Sharma said: “Tackling climate change is one of the most urgent shared endeavours of our lifetimes, demanding bold action from every nation to prevent catastrophic global warming.
“As a country, we have demonstrated we can both rapidly cut carbon emissions, while creating new jobs, new technologies and future-proof industries that will generate economic growth for decades to come.
“The UK’s new emissions target is among the highest in the world and reflects the urgency and scale of the challenge our planet faces.”