Oxfordshire County Council officer Pete Wallis talks about his conflict after discovering his council pension pot was funded by fossil fuels.
For many people, a pension is their largest financial investment.
It’s also the subject guaranteed to make their eyes glaze over.
Mine has suddenly become rather exciting.
Looking back over my career, I’ve passed through a pension pot version of the stages of grief; from denial to anger, through bargaining and depression, and while not yet acceptance, to hope.
First stage: denial. Retirement felt so distant, I didn’t give a pension a passing thought, and my early jobs had no provision. Landing a job with Oxfordshire County Council rescued me from pension lethargy. Joining the Local Government Pension Scheme (LGPS) was a no-brainer (you have to opt out) and the council’s Pension Fund Committee work tirelessly to ensure scheme members have an income on retirement. Despite my relief at securing a gold standard public sector pension, as retirement loomed, I wondered whether my pension would maintain my living standard.
Second stage: anger. I was shocked when a colleague told me she’d opted out of the LGPS because she didn’t want her money invested in ‘unethical’ companies. Like many, I hadn’t thought about how my pension works. Turns out my happy retirement was being funded by spreading lung cancer (tobacco investments) and climate chaos (fossil fuel companies).
October’s United Nations report says our climate problem is ‘near-term and urgent’. Worsening news makes me wonder whether there will be a world worth retiring into. The report adds: “We have to make a very rapid transition to clean energy, and fossil fuel companies are not compatible with what we need to do for a safe planet.”
Learning that the LGPS continues to invest my money in companies still exploring for ever more oil, coal and gas – when there are already known reserves – makes me fume.
Stage three: bargaining. Feeling implicated in this crime was partly ameliorated on discovering Fossil Free Oxfordshire, a campaign which has been actively lobbying our local councils to divest the LGPS from fossil fuels since 2014. I was delighted that this campaign persuaded the Pension Fund Committee to add 'including climate change' to the environmental, social and corporate governance issues that it considers, in March 2017. Unfortunately, since then, the committee failed to act, leading me to stage four: depression. Fossil Free Oxfordshire finds no consideration of climate change in investment decisions, minutes of PFC meetings or responses to questions they and LGPS members raise with the committee.
Fossil Free Oxfordshire says that in not taking climate risk seriously, the committee risks being in breach of their fiduciary duty. Accumulating evidence shows that not investing in fossil fuels does not negatively impact returns, while continuing to invest in them carries an increasing risk they become worthless ‘stranded assets’, as the world switches to renewables. The committee believes it can change the business practice of fossil fuel companies by 'engagement'. All the evidence suggests this has no practical effect. It might achieve small changes in company practices, but won’t change fossil fuel companies’ raison d’ȇtre: their entire business model is exploiting fossil fuels.
I’d love to reach the final stage, acceptance. Instead, I have hope. Other LGPSs are divesting - it can be done. Oxfordshire’s LGPS is now part of the Brunel Pension Partnership, which manages pension funds for 10 LGPSs in the south west and offers two fossil free funds – a low carbon and a sustainable global equities fund. To date, Oxfordshire’s committee has ignored both.
I hope a comparison of pensions to grief is not flippant. We all know about loss, and I feel the most profound grief when I consider the risk of losing everything I hold dear, because this generation is sleepwalking into avoidable environmental catastrophe. This is an easy win for the Oxfordshire LGPS. Let’s call on them to step out of the fossilised age and, in the words of the Brunel Partnership, start 'investing for a world worth living in'.
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