£16 billion of the Local Government Pension Scheme (LGPS) is invested in the fossil fuel industry with Greater Manchester’s Pension Fund the worst offender
The research, conducted through Freedom of Information requests, reveals a variance in approach to fossil fuel investment across UK local government pensions
Just 10% of funds hold over 50% of LGPS fossil fuel investments – with Greater Manchester Pension Fund & West Yorkshire Pension Fund each investing over £1 billion into fossil fuels
By contrast over 20% of local councils now invest less than 1% of their fund into fossil fuels – a 10 fold increase since 2020, the last time analysis was conducted.
Despite clear guidance that investors should not fund new oil and gas projects, local councils are still funding fossil fuel expansion, with over £8 billion of pensions invested in companies developing new oil and gas projects. These investments are turning “public savings into fossil fuel playthings,” say environmental campaigners.
“Expansion of fossil fuel production is not in line with Net Zero,” the Climate Change Committee warned this year , calling on industries to move away from high-carbon developments. Despite this, the total value of fossil fuel investments by local government pensions amounts to double the total market size of all renewable energy generation in the UK in 2022.
It also exactly matches the £16 billion investment the UK Government is looking to unlock through its Levelling Up Fund.
With virtually all oil and gas companies set to expand their operations campaigners are calling on pension funds to stop funding fossil fuels.
Rob Noyes, Divestment Campaigner and Researcher at Platform, said: “Investments in dirty fossil fuels turn public sector savings into fossil fuel playthings, pumping billions of pounds through the pensions pipeline into climate-wrecking fossil fuels. This money is syphoned from workers’ wages and squandered, when it should be fuelling the green and just transition that we so desperately need. Polluters are profiting at pensioners’ expense. To catch-up on climate, council’s must stop using pensions to prop up this deadly industry.”
Jamie Peters, climate coordinator at Friends of the Earth, said:“From insulating heat-leaking homes to facilitating mass public transport, councils are key to effective climate action, but this is undermined if local authority pension funds continue to fund fossil fuels. It’s time to ditch financially risky holdings in gas, coal and oil, and invest in accelerating the transformation to a carbon-free future.”
