The value of oil firm shares owned by UK public pension funds has fallen by £2bn in lower than 4 years as stress mounts on retirement schemes to withdraw their assist from environmentally damaging fossil gas producers.
Pension funds internationally have made strikes to regulate their portfolios for funding dangers arising from local weather change, however divestment from oil firms stays uncommon, despite proof that unchecked fossil gas consumption is resulting in a worldwide environmental disaster.
The value of shares in 9 main oil firms, together with BP and Royal Dutch Shell, held by 56 native authorities pension funds has collapsed by half from £3.6bn at first of April 2017 to £1.8bn, in line with estimates compiled by environmental marketing campaign group Platform London. The autumn in value strengthened the argument for fossil gas divestment, the group mentioned.
“If council pension funds are sincere about tackling the climate emergency, and safeguarding their members interests, the first step they must take is to . . . divest from stranded oil and gas stocks,” mentioned Robert Noyes from Platform London.
Higher Manchester’s £17.2bn pension fund sustained the biggest estimated loss at £375m, equal to greater than £1,000 per member. Estimated losses for West Yorkshire and Nottinghamshire had been £211m and £81m respectively.
Platform London submitted freedom of data requests to acquire the info from all UK native authorities pension funds. It excluded those who have mentioned they may divest or cut back their oil investments.
Dividends from fossil gas firms have traditionally offered an important earnings stream for pension funds, however payouts have been lower this yr as producers have struggled with diminished demand.
On the identical time, there are rising considerations concerning the long-term dangers of investing in fossil gas firms, as governments world wide look to do extra to make vitality programs sustainable.
Three in 4 UK pension schemes say they lack enough information about local weather change dangers, in line with a brand new survey that implies gaps in understanding the influence of worldwide warming might result in losses for the retirement financial savings of thousands and thousands of staff.
“Pension schemes understand that climate change poses risks and want to turn that concern into action, but they are limited in what they can do because it is difficult to obtain the data,” mentioned Pat Sharman, UK managing director of Caceis, the Crédit Agricole enterprise unit that carried out the survey.
Seventy per cent of a bunch of 93 UK pension schemes additionally mentioned they weren’t given sufficient data on local weather dangers information by their exterior asset managers.
Bigger pension schemes with property of greater than £5bn shall be anticipated to reveal climate-related dangers by the top of 2022.
“This will set the tone for climate change reporting across the entire pension sector. Trustees will need the necessary tools and knowledge to meet the new requirements,” mentioned Joe Dabrowski from the Pensions and Lifetime Financial savings Affiliation, which represents UK office retirement schemes.
Northern LGPS and LGPS Central, the funding managers for the Higher Manchester, West Yorkshire and Nottingham pension schemes, didn’t reply to requests for remark.