Update: Trafford Council passes fossil fuel divestment motion

13th October 2019
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A motion calling on the Greater Manchester Pension Fund to divest from fossil fuels was passed at the Trafford Council meeting on Wednesday 9th October. However, the original motion tabled by the Green Party Group was amended by the Labour Group. The motion that was passed read as follows:

This Council notes:

1.   That at least 5% of funds of the Greater Manchester Pension Fund (GMPF) are invested in Shell, BP and other fossil fuel companies.

2.    That fossil fuel assets and investments are likely to become ‘stranded assets’ with 80% having to be kept in the ground to prevent runaway climate change. Mark Carney, Governor of the Bank of England, has said that the vast majority of fossil fuel reserves are ‘unburnable’.

3.    That Trafford Council, along with the majority of other Greater Manchester Councils, as well as the Greater Manchester Combined Authority and Greater Manchester Health and Social Care Partnership have all declared climate emergencies.

4.    That several UK local government pension funds, other public sector organisations, universities, faith groups and whole cities and countries including New York and Ireland have committed to divesting in a planned way whilst protecting the pensions of current and future pensioners benefitting under the schemes and in line with their fiduciary duties.

5. That UNISON and the Trades Union Congress campaign for divestment in line with obligations to pension-holders.

We recognise that as a member of the GMPF Trafford Council as am employer and through employee contributions therefore has assets which could be invested in carbon intensive asset classes that are inconsistent with our commitments to tackling the climate emergency and the financial future of such asset classes is increasingly viewed as being uncertain. Council therefore welcomes and recognises the GMPF’s existing commitment to divestment and to meeting its duties under the Paris agreement in Climate Change.

Nonetheless Council stresses the importance of such divestment needing to take place as quickly as possible without undermining the fiduciary duties of the GMPF or the robustness of the GM pension pot.

This Council therefore resolves to:

1.     Ask the Leader to write to the Greater Manchester Pension Fund to request a position statement on the potential impact that divesting from carbon intensive assets will have on the GM Pension Fund. This statement should assess the impact that a gradual programme of divestment and diversification over a period aligned to the next actuarial assessment which sets out a short term, medium term and long term divestment strategy will have on the future liability profile of the fund.

2.      Mandate our representative on the Fund to call for and work towards divestment alongside a proactive approach to utilising the funds for local green growth including Community Wealth Building strategies which support green investments, whilst ensuring the Fund continues to generate a sufficient level of return to ensure the current and future sustainability of the fund.

3.     Support the GMPF in the development of materials to explain the changes to current and future pensioners including the impact and benefits of divestment approach.

Original post

The Trafford Council meeting on Wednesday 9th October will debate a motion submitted by Trafford Green Party councillors calling on the Greater Manchester Pension Fund (GMPF) to divest from fossil fuels.

Last year, Trafford Council declared a climate emergency. But we need actions, not just words.

Trafford Council has assets within the GMPF valued at £732 million (at 31/3/19). The Pension Fund states that “it generally holds about 5% in traditional fossil fuel companies such as BP, Shell and Centrica”.

However, analysis by the Fossil Free Greater Manchester campaign indicates that GMPF actually has 7.5% of its funds (over £1.8 billion) invested in fossil fuels. 

This would mean that Trafford Council has over £50 million invested in BP, Shell, Centrica and other fossil fuel companies!

This money should be invested in green solutions, instead of supporting these climate-wrecking industries. We want the Council to change it but we need your help.

How can you help?

1. If you live in Trafford, please contact your councillors asking them to support the motion. Let them know how important this issue is to you. You can find their contact details from Trafford Council website or you can pop your postcode into the ‘They Work for You’ website

2. Come to the Trafford Council meeting on Wednesday night. Meet at 6pm on Wednesday 9th October at the main entrance (opposite the Old Trafford cricket ground). Bring placards and your friends and family!

See below for the full text of the motion.

10e.  Motion Submitted by the Green Party Group – Investing in Green Solutions Instead of Fossil Fuels

This Council notes:

1. That at least 5% of funds of the Greater Manchester Pension Fund (GMPF) are invested in Shell, BP and other fossil fuel companies. (See paragraph 3 of Appendix A of GMPF document in responding to Trafford’s climate emergency motion)

2. That fossil fuel assets and investments are likely to become ‘stranded assets’ with 80% having to be kept in the ground to prevent runaway climate change. Mark Carney, Governor of the Bank of England, has said that the vast majority of fossil fuel reserves are ‘unburnable’.

3. That Trafford Council, along with the majority of other Greater Manchester Councils, as well as the Greater Manchester Combined Authority and Greater Manchester Health and Social Care Partnership have all declared climate emergencies.

4. That Trafford has assets within the GMPF valued at £732 million at 31/3/19.

5. And so at least, approximately £36 million of Trafford’s funds are invested in the fossil fuel industry.

6. That these facts pose a financial threat to Trafford Council.

7. That several UK local government pension funds, other public sector organisations, universities, faith groups and whole cities and countries including New York and Ireland have committed to divesting.

8. That UNISON and the Trades Union Congress campaign for divestment in line with obligations to pension-holders.

This Council therefore resolves to:

1. Ask the Leader to write to the Greater Manchester Pension Fund to request a position statement within 3 months on the potential impact that divesting from fossil fuel assets will have on the GM Pension Fund. This statement should assess the impact that a gradual programme of divestment and diversification over a 2-5 year period will have on the future liability profile of the fund.

2. Mandate our representative on the Fund to call for and work towards divestment.

3. Work with trade union representatives and the workforce to involve them in divestment and diversification plans, providing them with a comprehensive assessment of the impacts and benefits of these changes.

4. To focus re-investment in areas that minimise climate change and reduce the Fund’s carbon footprint; while ensuring the Fund continues to generate a sufficient level of return to ensure the current and future sustainability of the fund.