Tell Greater Manchester Pension Fund that it’s (well past) time to start divesting !
The Greater Manchester Pension Fund is consulting on its Investment Strategy Statement. The closing date for responses is Sunday 19 November. There’s more detail below, but our key message is that engagement with fossil fuel companies doesn’t work, and that it’s time to start divesting.
How do I respond to the consultation?
It’s really easy – just click on the following link and fill in the short form.
There’s also a link to the draft strategy statement, if you’d like to read it in detail.
Here’s some more background info on the consultation:
What is the Investment Strategy Statement?
This Statement is a government requirement and it includes a lot of fairly technical information about how investment decisions will be made and governed. It also mentions risks to pensions and investments and specifically that from climate change. However, it then goes on to emphasise the tactic of engagement (via meetings including AGMs and correspondence) with companies to the exclusion of any other way of addressing the risk.
What’s wrong with engagement?
We’d argue that fossil fuel companies are not going to become climate-friendly as a result of such “shareholder activism”. Instead, like the rest of the international fossil fuel divestment movement, we say that divesting from these holdings is the best way to send a strong signal to the market as well as to reduce the Fund’s exposure to the financial risk of “stranded assets” – fossil fuel reserves that cannot be burned.
What should I say?
We suggest you make the following points:
1. You welcome the Fund’s acknowledgement of climate change as a key risk.
2. The strategy gives too much emphasis to “engagement”, especially as the evidence is that it’s ineffective, or worse, it allows fossil fuel companies like Shell and BP to “greenwash” their activities.
3. The Fund should set a clear deadline for fossil fuel companies to change their business models – for example, by ceasing investment in exploration for new fossil fuel reserves, and withdrawing from extraction of the most polluting fossil fuels (such as coal and unconventional oil and gas) within 12 months. The Fund should then start divesting from those companies that fail to meet the deadline.
Where can I find out more?
- New research released on 9 November shows that GMPF has the largest fossil holdings, by both value and by percentage, of all the UK local government pension funds, with more than 10% of the total local government fossil fuel holdings.
- The two biggest investments are in Shell and BP. Reports last month from engagement-orientated NGO ShareAction concluded that “their current business models continue to ignore the reality of the low-carbon transition” and that “if risk reduction is not demonstrated, investors should divest their holdings…”.