ESCC urged to accelerate pension scheme's fossil fuel divestment

Campaigners from Divest East Sussex and XR Lewes have announced plans to hold a protest outside East Sussex County Council’s (ESCC) meeting on 7 December, over concerns that the East Sussex Pension Fund is yet to divest from fossil fuels.

The campaigners pointed out that whilst the ESCC declared a climate emergency two years ago, it is yet to divest the East Sussex Pension Fund from fossil fuels, estimating that there are “tens of millions of pounds” of local pensions invested in oil and gas companies, such as Shell and BP.

A Divest East Sussex spokesperson commented: “By clinging on to its investments in fossil fuel companies like Shell and BP, East Sussex County Council is effectively providing a fig-leaf for these companies’ ongoing attempts to block effective climate action.

"With the window of opportunity to limit global warming to 1.5ºC rapidly closing, this refusal to stop investing in fossil fuels is nothing less than criminal.

"It’s time for the County Council to finally get serious about the climate crisis and commit to fully divesting local people’s pensions from fossil fuels.”

The protest has support from Brighton & Hove Friends of the Earth, Frack Free Sussex, Lewes Green Party, Lewes Labour Party, Transition Town Hastings, XR Eastbourne and XR Hastings & St Leonards.

The campaigners also noted that a number of surrounding councils, such as Hastings Borough Council, Lewes Town Council and Brighton & Hove City Council, have previously called on ESCC to stop investing in fossil fuels, alongside the MP for Brighton Pavilion, Caroline Lucas and MP for Lewes, Maria Caulfield.

However, the East Sussex Pension Fund has argued that it takes climate change "seriously" and has taken "many steps" to reduce its holdings in companies that generate a portion of their revenue from fossil fuel sources.

Indeed, the fund confirmed that such holdings have already been reduced from 4 per cent in June 2020 to 2 per cent in June 2021, stating that, once approved changes in investments have been fully implemented, this exposure will be "much lower with no exposure to fossil fuels within the equity portfolio".

It also pointed out that 10 per cent of its investments specifically focus on sustainable investment opportunities that will make a positive impact, while the 10 per cent allocation into passive has been moved into an investment that replaces the traditional energy sector index with a climate solutions index.

A spokesperson from the East Sussex Pension Fund said: “The pension fund manages the pensions for over 78,000 members and on behalf of 130 employers, with the primary objective to pay pensions in full when they are due.

“The fund has a policy of engagement rather than divestment and engages with underlying investee companies through its investment managers and the membership of engagement groups.

"As the fund is only a unit holder in pooled investments and not a direct investor in companies, it cannot divest from a company itself, but it can choose which pooled investment to invest; divesting from fossil fuels without proper planning could put our beneficiaries financial security at risk and result in the fund being unable to meet its legal duty.

"The fund views climate change risk to be further reaching than just fossil fuel companies and is working hard to understand where the bigger climate change risks sit within the investment portfolio as well as what the impact various warming scenarios may have to our members’ pensions.”

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