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Fiduciary Duty Calls Union To Commit To Divesting Pensions From Fossil Fuels

Posted on June 23, 2017 at 11:40 AM

UNISON, the largest body representing local government workers in the UK, has taken a decision that will reverberate in the fight for climate action in the name of every individual. Its decision should be noted by any business hesitating to act in a post Trump world, but keen to be applauded for its leadership.

The public services union has just passed a motion that commits it to “seek divestment of Local Government Pension Schemes from fossil fuels”. UNISON will now promote to a five-year timeline for divesting "for all pension funds where we have members" from fossil fuels, "giving due regard to fiduciary duty”.

Ah, fiduciary duty. It's high time to redefine it as an obligation when it comes to action on climate risk.

"Our priority always needs to be to ensure our member's pensions are protected. We are increasingly aware that investments in fossil fuels are not only harmful to the environment but put the sustainable future of our pensions at risk. Unison will now extend our campaigns to develop alternative investment strategies to enable pension funds to divest from fossil fuels over a number of years" said Stephen Smellie, Deputy Convenor in UNISON Scotland, who brought the motion to conference.

Local government pensions in the UK are worth over £200 billion and are heavily exposed to fossil fuel companies. An investigation in 2015 showed £14 billion invested in fossil fuels across local government pensions, with Greater Manchester’s pensions the most exposed with £1.3 billion invested (9.8% of its holdings).

"We're thrilled to see UNISON joining the divestment movement. UNISON's decision to divest shows that Exxon and Shell have no place in our future. Stranded fossil fuel assets threaten our pensions. And investing instead into clean energy, public transport, and social housing can kickstart our economy" said Mika Minio-Paluello, energy economist at thinktank Platform who has researched local government pension exposure.

Local government pension funds have already started moving towards divestment from oil, coal, and gas. In 2016 Waltham Forest passed divestment policy, quickly followed by Southwark. Full and partial divest commitments already total £10 billion worth of local government pensions.

Global divestment commitments total over $5 trillion, according to UNISON.

As I wrote on Forbes in May 2015, On Climate Change We Are All Shareholders.

You can find out how much your local council invests in fossil fuels HERE.


Categories: Governance, Pensions, Climate