Revealed: scale of investment in climate-harm industries by NE council pension funds

Over £730million (nearly three-quarters-of-a-billion pounds) is invested in climate-harming fossil fuel industries by North East council pension funds, according to new research revealed today.

Tyne & Wear and Teesside local government pension funds (LGPF) now rank among the nation’s worst offenders when it comes to how heavily they are supporting the oil, gas and coal industries.

In the case of the Tyne & Wear Pension Fund (TWPF), the investment is twice the amount previously thought (though researchers say this might simply be due to more accurate analysis rather than doubled investment).

A nine-month research project by a national group calling on all LGPFs to ‘divest’ from (pull out of) fossil fuel industries has found that:

• the Tyne & Wear Pension Fund has £461.4million invested in fossil fuels
• Teesside’s Pension Fund has £211.6million invested
• Durham County Council’s Pension Fund has £59million invested

The figures – which come from data released by the funds themselves – also show that the Tyne & Wear (at 5.1% of its known total portfolio) and Teesside (at 5.4%) funds are among the highest-proportion investors in oil, gas and mining in the UK.

The research findings come hot on the heels of Storm Babet, which wreaked havoc across the North East and Scotland – in the latest extreme weather event which experts say is caused by climate change.

The data shows that on average, LGPFs invest 3.9% of their portfolios in fossil fuel companies, but that with their higher rates of investment, both the big two North East funds now rank in the top 14 worst carbon-creating LGPFs in the UK.

By comparison, Durham County Council’s fund invests 1.7% of its portfolio.

The new findings today drew angry condemnation from Divest, the group behind the research.

Lesley Mountain, spokeswoman for Divest Tyne & Wear, said: “It is beyond belief that our own money can be used to damage all our futures – and on a scale that’s only now becoming apparent.

“Tyne & Wear – one of the UK’s largest council pension funds – has assets of £12.7bn that come from the pockets of members and local council taxpayers.

“At least £461m is invested in fossil fuels; this should be used for sustainable investments, not poured into energy companies that are earning record profits and preventing temperature rises being kept within safe limits by expanding production.”

She added: “Tyne & Wear won’t listen – it even excludes members from its AGM – but increasing numbers of councils, members and protestors are determined to speak out to protect our futures.”

TWPF is already under pressure from a growing number of council challenges and protests by campaigners about its policy of continuing fossil fuel investment until 2050.

A Mother’s Rebellion Circle in September was supported by families, fund members and campaigners, and protests were staged in all six council areas in the pension scheme earlier this year: Gateshead, Newcastle, South and North Tyneside, Sunderland and Northumberland.

A vigil will take place outside the pension fund’s South Shields Town Hall HQ on 10 November, in a protest about members’ exclusion from that day’s private annual meeting.

Organiser and pension fund member Alison Whalley said: “We will not be silenced – Tyne & Wear Pension Fund is burning away our money and contributing to environmental breakdown, when it is supposed to look after our interests.”

Rob Noyes, UK Divest researcher, said a total of £16billion is invested in fossil fuels by UK council pension funds.

“Investments in dirty fossil fuels turn public sector savings into fossil fuel playthings,” he said.

“Polluters are profiting at pensioners’ expense. Councils must stop using pensions to prop up this deadly industry.”

It’s possible that the total investment figures are even higher, since the latest data doesn’t cover 30% of pension fund assets – for which data was not provided by fund managers (who were asked to provide figures over nine months, under Freedom of Information requests).  

Today’s news comes only two months after several major reports produced evidence that council pension funds were using what Divest describe as “staggeringly unrealistic predictions” about the impact of climate change on financial markets.

The Pension Regulator called on fund trustees to review their approach and challenge climate risk advice based solely on economic predictions, rather than climate science.

Click here to view the Divest research figures and information.