An environmental group is urging the Tayside Pension Fund to move its investments out of fossil fuels as a worldwide push for greener energy gathers momentum.
Friends of the Earth (FOTE) Tayside is questioning the “persistent belief” such investments are sound and say switching to renewable energy companies would be beneficial both environmentally and financially.
FOTE say it currently has £117 million invested in the industry, despite Dundee City Council having declared a climate emergency in June 2019.
They say investments include £6.86 million in Royal Dutch Shell, co-owner with Exxon of the Mossmorran plants in Fife.
The site is Scotland’s third largest polluter.
Funds seeing ‘big losses’
FOTE, which has branches across the world, campaigns for better policies to fight climate change.
Andrew Llanwarne, co-ordinator at FOTE Tayside, says many big organisations are realising profits may no longer lie in industries such as oil.
He said: “Evidence from the past three years shows that the value of investments in fossil fuels has halved, resulting in big losses to pension funds.
“Meanwhile, environmental technology is booming.
“This reflects the advice from experts such as the former Bank of England governor Mark Carney that fossil fuel reserves will become stranded assets.
“We’re encouraging the Tayside Pension Fund to catch up with their thinking.”
The campaign group has approached a number of other local voluntary organisations for support.
It has also contacted elected members of the city council, several of whom are members of the Pension Fund Committee, to urge them to support the shift to a greener economy.
Mary Henderson, who is leading the latest Tayside campaign, said: “Divesting from fossil fuels would be better for the climate and moving away from them would not harm jobs.”
Council wary of risking finances
The local authority says it has a legal and financial duty to act in the best interests of its members and beneficiaries.
However, it does not undertake any direct investment. Instead, it engages external investment managers to make investment decisions on its behalf.
There has been discussion in recent years over whether the fund should move away from certain investments.
In 2013, councillors decided the fund would not seek fresh investment in tobacco firms, however, it is still believed to hold many stocks.
The council has also made a big push to become a greener city in recent years and is one of the UK’s leading local authorities in electric vehicle usage.
A spokesperson for Dundee City Council said: “In keeping with its fiduciary responsibilities, Tayside Pension Fund has not introduced any disinvestment policy in fossil fuels in order to guard against extremes or selective interpretation which may influence the choice of investments and potentially risk material financial detriment to the fund.
“As one of the 45 employers within Tayside Pension Fund, Dundee City Council could take the decision to ask Tayside Pension Fund to undertake a review into fossil fuel investments to include consultation with the other employers in the fund.”