Wednesday, 16 December 2015

Fossil free pension fund, Reading motion a success

As you might have seen here the Green Party divestment motion at a Reading Council meeting was a success. The final amended motion is below (actions at the end). Still some way to go to get Berkshire Pension Fund to divest but this is a good start.


Recommendations moved by the Chair:

(1) Policy Committee notes:
· The Council’s public commitment to tackling climate change.
· That the Royal County of Berkshire Pension Fund, of which most Council staff are members, currently has over £27m invested indirectly in fossil fuels.
· That if fossil fuel companies extract and burn just 20% of the reserves they hold, this is likely to cause serious adverse climate change
· The legal duties on the Pension Fund under statute and under general trust law principles to manage the Scheme in the best financial interests of the Scheme members and beneficiaries. i.e. the Then Pension Fund must invest the money available to meet its future liabilities, and that as the Local Government Pension Scheme is a defined benefit scheme with regulated contributions from employees, the impact of investment performance feeds through into employer contribution rates, which are set to enable to Pension Fund to move towards full financing over a 30 year transitional period and these in turn will directly impact the Council’s budget.
· That the Pension Fund employs several specialist fund managers to make investments on its behalf, so has limited ability to change those investments at short notice.

(2) Policy Committee believes:
· The urgency of stopping climate change requires that we progressively stop burning fossil fuels now.
· That appropriate pension fund investment can be a positive driver towards a low-carbon economy.
· That public bodies and their related pension funds should, where possible, and where consistent with their legal duties direct investment into 'green energy' infrastructure rather than invest in fossil fuel extraction companies
· That local authority pension funds can and should consider directing a share of their investments to supporting the sustainable development of their local economies.

(3) Policy Committee resolves:
· To support the principle of fossil fuel divestment, and to encourage, through the Climate Change Partnership, Reading’s businesses and institutions to divest from fossil fuels.
· To include an explicit Ethical Investment Statement in the Council’s Treasury Strategy Statement:
The Council will not knowingly invest directly in businesses whose activities and practices pose a risk of serious harm to individuals or groups, or whose activities are inconsistent with the Council’s Corporate Plan and values. This would include institutions with material links to
- human rights abuse (e.g. child labour, political oppression)
- environmentally harmful activities (e.g. pollution, destruction of habitat, fossil fuels)
- socially harmful activities (e.g. tobacco, gambling)
These principles will be applied to all investments made by the Council.
· Not to accept direct sponsorship and advertising from fossil fuel companies, and to ask Reading Buses to adopt a similar position in relation to bus advertising.
· That the Managing Director write to Royal Berkshire Pension Fund and ask them to review and strengthen their own Ethical Investment statement, consider membership of the Institutional Investors Investment Forum with a view to avoiding new investment in the top 200 publicly-traded fossil fuel companies and to consider the possibility of divesting from fossil fuel investments (whether equities or corporate bonds issued by such companies) by 2020.

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