5. Written question from Mr Jones for reply by Chairman of the Pensions Panel Question
The Cabinet Member recently chaired a meeting of the Pension Panel that considered a motion submitted by Adur & Worthing Borough Councils calling on West Sussex County Council to divest all funds currently invested in fossil fuel companies and instead invest in renewable sources. Please can he advise:
|Question from Mr Jones||Answer by Chairman of the Pensions Panel|
|(a) Has the amount of members’ and employers’ money invested in fossil fuels gone up or down over the past few years, both in real terms and as a percentage value of the total fund?||The table below shows direct investments in fossil fuel companies over the past few years:
|(b) Are employers and scheme members, including pensioners, being kept fully informed about fossil fuel investment? Are they informed of climate change risk, both financial and environmental, associated with these unsustainable investments?||It is important to acknowledge that member benefits are set nationally and not dependent on the investment returns of the Pension Fund. The Pension Fund’s Investment Strategy Statement and Annual Report are available to all stakeholders. These two documents set out how the Pension Fund’s approach to responsible investment and consideration of environmental, social and corporate governance factors in the selection, non-selection, retention and realisation of investments and the Pension Fund’s performance. The Pension Fund has also provided a Responsible Investment Update to district and borough colleagues in response to their recent contact.|
|(c) Has any major fossil fuel company, in which the Pension Fund is invested, started to downsize their non-renewable energy operations? Has any major fossil fuel company, in which the pension fund is invested, established and floated a separate renewable energy enterprise, into which the fund has invested or has considered investing, provided it with any risk reduced dividend income?||Reliance Industries is an example of a company investing out of the energy sector. Reliance Industries is an Indian conglomerate, with substantial investments in refining and petrochemicals, mobile telecoms and retail. The company uses cashflow from its energy assets to fund growth in Reliance Jio, the world’s largest 4G telecoms network, and its ecommerce retail platform. In recent months Reliance announced two deals that will see it commit ever greater focus to its (non-energy) operations. The first was the sale of 20% of its stake in its refining/petrochemical assets to Saudi Aramco for $15bn. The second deal was a sale of a 49% stake in its petrol retail assets to BP. Our fund managers view Reliance as one of the most exciting businesses to invest in globally. Its decision to sell down part of its energy operations and focus on the digitisation of India only reinforces their belief in the future growth of the company. Reliance Industries is classified in the Energy sector. Other companies held within the portfolio, including Royal Dutch Shell and Equinor are investing to maintain their current production but their directed growth is towards their renewables businesses, which will eventually become the core business.|
|(d) Though the Pension Fund may not be legally obliged to consult members and take into account their views on fossil fuel investments, does the Cabinet Member not agree that were a growing majority of those members to wish such holdings to be divested, continued resistance by the fund’s Trustees to meet the aspirations of most members would come to be seen as unethical and, eventually, in a free democratic society, as intolerable?||The Pension Fund has a responsibility to act in the best interest of scheme employers and scheme members. The Pensions Panel is mindful of its legal duty to obtain the best possible return on the investments of the Pension Fund it administers. However, there is no requirement to invest in line with member views where it is not considered to be in their best interest – even if views were held by the majority. The fund managers actively engage with companies on a range of matters including climate change, financial and environmental risk factors. Investment decisions are directed towards achieving a wide variety of suitable investments and what is best for the financial position of the Fund (consistent with an appropriate risk profile), in line with the Pension Fund’s fiduciary responsibility.|
|(e) Finally, does the Cabinet Member agree that although West Sussex County Council claims to accept that we need to respond to the climate emergency, by continually failing to act to change the investment policy of the Fund in this important way, it is not taking the practical action needed to make this happen? Why are he and his Trustee colleagues failing to recognise the gravity of the situation we all face, and the responsibility personally and collectively, to urgently take measures to remove fossil fuel investments from the Pension Fund?||In its role as Administering Authority the Council must maintain, administer and invest the Fund to ensure that pensions can be paid to members of the West Sussex Pension Fund when due and has a duty to both the scheme employers, scheme members and tax-payers in doing so. Recent opinion sought by the Scheme Advisory Board confirms the position that the Administering Authority’s powers of investment must be used for investment purposes, the Council’s interests or views should not be placed above other employers and it should not impose its own views on the management of the Pension Fund.
As a County Council our Climate Change Advisory Group is working hard on plans to become carbon neutral by 2030 and we have already significantly cut our carbon emissions by making our buildings more energy efficient.
In Chichester on Saturday 7 September at 11:58 a Declaration of Rebellion was read at the entrance to The Council House, North Street by Extinction Rebellion Chichester.
The Declaration was to announce that Extinction Rebellion Chichester will be supporting the International Rebellion that will commence a month hence, on 7 October.
The Declaration stated that even though we are currently in a mass extinction event our Government has failed to provide adequate protection. So, “it becomes not only the right, but the duty of its citizens to act on behalf of the security and well-being of our children, our communities and the future of life itself.”
Declaration of Rebellion by Extinction Rebellion Chichester
Tom Broughton and Sue Jones of Extinction Rebellion Chichester with the Declaration of Rebellion on The Council House.
The Declaration of Rebellion was supported by City Councillor Pauline Gaskin
We hold the following to be true:
This is our darkest hour.
The science is clear.
Humanity is caught up in events that, unless addressed immediately, threaten to catapult us into the destruction of all we hold dear: this land, our peoples, the ecosystems that give us life, and the future of generations to come.
The breakdown of the climate and ecological systems on which we depend, the loss of diversity in our oceans and lands, the increase in pollutants that destroy life as we know it, are all proceeding with increasing rapidity. A mass extinction event is under way on earth. An event that we have created and that now threatens our own life.
These crises can no longer be ignored, denied, or go unanswered.
Our Government has failed.
The wilful complicity displayed by our Government has promoted short term gain and private profit at the expense of a stable climate and biodiversity. This is threatening our well-being and the life of all creatures.
When Government fails to provide adequate protection, it becomes not only the right, but the duty of its citizens to act on behalf of the security and well-being of our children, our communities and the future of life itself.
We hereby declare that the bonds of the social contract between government and citizens have been rendered null and void.
We declare ourselves to be in rebellion against our Government until informed solutions be applied to change our present cataclysmic course.
We call upon every principled and peaceful citizen to rise and rebel with us on October 7th.
We refuse to bequeath a dying world to future generations by failing to act now.
We act in peace.We act on behalf of life.