GM Pension fund must go green

The Greater Manchester Pension Fund must divest from fossil fuels, not only to protect the planet, but to protect the pensions of thousands of people across the region. At the next full meeting of Oldham Council (Wednesday 14 July 2021), the Liberal Democrats will propose a motion to deliver exactly that. 

Councillor Sam Al-Hamdani, who will be proposing the motion, said: “It is time the Greater Manchester Pension Fund did the right thing by our environment and pulled out the money invested in fossil fuel industries that massively contribute to global warming, and instead reinvest it in green technologies which do good.”

The Fund is currently one of the biggest investors in fossil fuels with over £1.7 billion in the oil, coal and gas industries.

“As an employer, Oldham Council pays into the fund to top up the contributions of our employees, yet we are a Council committed to becoming carbon neutral within five years,” added Councillor Al-Hamdani. “How can we achieve our goal of carbon neutrality when our money continues to bolster a fund that is so invested in industries which contribute to the destruction of our environment and the pollution of our air?”

The motion is being backed by Councillor Louie Hamblett. He explained that divestment is not only ethical, it also makes financial sense.

“To prevent irreversible global warming at least 80 per cent of all proven fossil fuels must remain in the ground and unburnt. This will mean the rapid decline in the operations of fossil fuel companies and a rapid decline in the value of fossil fuel stocks.

“Green investment has become more and more attractive financially, and when the stock market crashed at the start of coronavirus, it was sustainable investments that bounced back first.

“It is surely common sense to divest now, whilst fossil fuel stocks have value, and reinvest the money in environmentally sustainable businesses. It will preserve the value of the fund, ensure future returns to people across Greater Manchester, and do good by our planet.”

The motion tabled at the Full Council meeting on 14 July 2021 reads:

Council 14 July 2021 – Notice of Opposition Business – Motion 1 - Pension Fund Divestment from Fossil Fuels

This Council recognises that:

  • Burning fossil fuels contributes significantly to global warming, jeopardising the stability of our climate upon which our well-being and economy depend. Such activity also has a negative impact upon air quality and so public health.

  • Research demonstrates that 80% or more of the world’s proven fossil fuel reserves will have to remain unburnt if we are to have a reasonable chance of keeping global warming to well below 2 degrees Celsius, the globally agreed target for climate change mitigation. 
  • Since 80 per cent of fossil fuels must remain in the ground, the reserves of the fossil fuel industry risk becoming ‘stranded assets’ with little or no value – representing a substantial financial risk for those that invest in them.
  • Greater Manchester Pension Fund currently has around £1.7 billion invested in the oil, coal and gas industries. This is environmentally and financially irresponsible. 
  • To date, over 1,100 institutions representing over $14 trillion in assets have committed to divest from fossil-fuel companies.  These include the World Council of Churches, the Irish state, New York City, the British Medical Association and a growing number of UK local authority pension funds.
  • As a local authority with a commitment to become carbon-neutral by 2025, it is illogical for Oldham Council to make employer contributions towards a pension fund that is committed to investments in fossil-fuel companies.

Council resolves:

  • Not to invest directly in fossil fuel companies.
  • To mandate its representative to the Greater Manchester Pension Fund Board to call for the adoption of Responsible Investment policies which:
    • Immediately freeze any new investment in the top 200 publicly traded fossil fuel companies; 
    • By the end of this year, divest from direct ownership of companies involved in coal mining;
    • Within two years, divest from direct ownership of all fossil fuel companies, along with any commingled funds that include any fossil fuel public equities and corporate bonds;
    • Set out an approach to quantifying and addressing climate change risks affecting all other investments, and
    • Focus future investments on areas that minimise climate change risk and, where possible, invest in local climate solutions that will benefit fund members, their families and the wider community
  • To ask the Chief Executive to write to the Leaders and Chief Executives of the other 9 Greater Manchester local authorities outlining this Council’s position and asking for their support.

Proposed by:                                                                 Seconded by:
Councillor Sam Al-Hamdani                                            Councillor Louie Hamblett