Campaigners call on GMPF to divest from fossil fuels

Campaigners are calling on the Greater Manchester Pension Fund to divest from fossil fuels as they claim the fund is “out of touch” with public mood.

The fund is the UK’s biggest local authority pension fund with over 370,000 members and over £22bn in assets.

According to a 2018 report by Go Fossil Free, over 10 per cent of the fund, up to £2bn, is invested in oil, gas and mining companies.

Fossil Free Greater Manchester member, Stuart Bowman, said: “We need to act together to tackle climate change. GMPF is totally out of touch with the public mood and has no clear plan for urgently taking pensioners’ money out of fossil fuels”

The campaigners highlighted the United Nation’s Intergovernmental Panel on Climate Change (IPCC) that global emissions of carbon dioxide (CO2) need to fall by 45 per cent by 2030 or we risk catastrophic change. It has been estimated that over 80 per cent of fossil fuels must be kept in the ground to limit global warming.

Bowman added “Despite the changing public mood, GMPF is failing to act, putting pensioners’ money at risk and adding to the climate crisis. Where it was once considered a leader, GMPF is now lagging behind other pension funds in its glacial response to the climate emergency”.

Campaigners highlighted that parliament, the Labour Party and several Greater Manchester councils have declared a climate emergency. Furthermore, they said that the GM Combined Authority wants the region to be one of the greenest places in Europe.

University of Manchester, Tyndall Centre on Climate Change, Dr John Broderick, said: “The carbon budgets we developed for Greater Manchester are intended to meet the Paris Agreement’s temperature objectives. To keep within this limit 80% of exploitable coal, oil and gas reserves have to remain under the ground. We need to tackle both the demand for fossil fuels and the supply and divesting is an effective way to do this.”

A growing number of local authority pension funds have already begun to sell their investments in fossil fuels, including South Yorkshire, Lambeth and Haringey. Globally over 1,000 institutions have done so, with commitments to divest over US$9trn, campaigners said. The campaigners plan to gather at the fund’s officers on the afternoon of 19 July.

A GMPF spokesperson said: “The Greater Manchester Pension Fund committed two years ago to being 100 per cent carbon neutral by 2050 if not sooner, which is a higher standard than government has set itself.

"We are the biggest local government investor in renewables and energy efficiency with £0.5bn invested and leading investment opportunities for other funds. The pension fund’s holdings are a matter of public record and details are transparently published on our website along with our responsible investor policy.

"The Greater Manchester Pension Fund is working hard to become carbon neutral and it has been recognised by the Environment Audit Committee as being one of the most engaged in the country in doing so. This needs to be balanced against the Fund being top performing over 30 years and creating an additional £3.7bn of value above that of the average LGPS pension fund.

"The Fund has a fiduciary duty to demonstrate that its investment decisions do not threaten its financial performance, and the fact of the matter is over the last three years, we achieved over £400m more in returns than if we had divested from equities in such companies such as BP or Centrica, formerly known as British Gas.

"Accordingly, with such clear evidence that disinvestment rushed at this stage would cause material financial detriment to the fund, we need to find a ‘Just Transition’, which ensures we do not transfer the burden of this cost to the employers and taxpayers of Greater Manchester alike, which would result in significant Council tax hikes, and importantly avoids job loses for residents across the conurbation who are employed in these industries.

"As part of a recent review of investment strategy we are currently implementing £2.5 billion of the fund assets being divested to a low carbon approach targeting a significant reduction in carbon footprint and intensity.

"In a meeting with Fossil Free GM last week it was recognised we share same goal of a zero-carbon economy as quickly as possible although Fossil Free GM would like us to go faster. We are working on this but we are also committed to a Just Transition ensuring interests of workers & communities are properly taken into account.”

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