Long-awaited success for Fossil Free Oxfordshire

We thought the day might never come, but we finally have a move in the right direction in Oxfordshire!
Climate change included in the ISS
The Pension Fund Committee met on Friday to sign off their Investment Statement Strategy and during the meeting itself agreed to insert the words “including climate change” to the first sentence, which now reads:

“The Committee recognises that environmental, social and corporate governance (ESG) issues, including climate change, can have materially significant investment implications.”

New accountability and reporting mechanisms

I think even more significantly, the Committee responded to our demands (first made in July 2015 and repeated numerous times since) for greater accountability and transparency in how they ensure their fund managers mitigate climate risk. They told us they will use the Transition Pathway Initiative to assess all holdings on a four-monthly basis, further investigate any holdings that score poorly, and divest from companies that do not perform acceptably. They will develop a reporting mechanism that allows them to demonstrate to the public how this process reduces their exposure to climate risk. We need to examine the Transition Pathway and hold them to their word to divest from poorly performing companies, but this is progress we are very excited about.

Piling on the pressure

Our campaign has been going about three years and our target had long seemed resistant to our message. We knew that to get a shift we had to pile on the pressure so there was a frantic flurry of activity in the weeks leading up to the meeting. We encouraged supporters and local groups via our networks, the petition etc to apply to address the meeting using this briefing. We think about 25 did (an unprecedented number for this committee) and all were told they would not be allowed to speak. They were invited to send written statements which were circulated to the committee members, so the members received a bunch of diverse and brilliantly-penned arguments. We also encouraged people to turn up to the meeting, even though they were refused permission to speak at it. On the day there were at least 25 of us in the public seating which sent a powerful signal that people were demanding action. There’s no way this shift would have happened without the help of this fabulous band of volunteers.

Then to add to the excitement, just days before the meeting we learned from Simon Bullock at Friends of the Earth about the ClientEarth/Share Action referral to the Pensions Regulator (Oxfordshire gets a name-check in the referral, which was nice), and took full advantage of that. Thank you Simon for all your amazing support in the run-up to the meeting!

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Referral to Pensions Regulator and exposure of Committee members to legal challenge

We have an important update!  Fossil Free Oxfordshire has just been alerted to these facts by the environmental law organisation ClientEarth:

  • In December 2016 ClientEarth received legal opinions from two leading UK barristers that pension fund trustees who fail to consider climate risk in their investment strategies could be exposing themselves to legal challenge.
  • Oxfordshire Local Government Pension Scheme is one of a number of UK LGPSs that have recently been referred to the Pensions Regulator by ClientEarth and ShareAction. They have serious concerns about the way in which many LGPS funds are approaching the financial risks associated with climate change, putting scheme members’ savings at risk.

In the referral, Oxfordshire is identified as an LGPS that operates under the misconception that “By delegating day-to-day investment decisions to external investment managers, the administering authority has discharged its legal duties to manage climate risk.”

Oxfordshire LGPS could demonstrate to the Regulator that the Committee now recognises its duty and ability to consider and address climate risk at portfolio level by including a statement to this effect in its new Investment Strategy Statement (a document that all LGPSs have to submit by 1st April 2017). The Conservative-led Councils in East Sussex and Wiltshire have both taken such a step, and have included these statements in their Investment Strategy Statements:

“The Fund believes that climate change poses material financial risks to the Fund but that it also presents positive investment opportunities”. 

East Sussex County Council LGPS

“One area of focus for the 2017 strategy review is the risks caused by climate change and the associated issue of stranded assets. The strategy review will look at the carbon footprint of the Fund’s equity portfolio and consider reduction options, as well as conducting a temperature rise scenario analysis that may have implications for the Fund’s future asset allocation.”

Wiltshire County Council LGPS (draft ISS approved 1 March)

Oxfordshire LGPS could add such a statement to their ISS tomorrow at the Pension Fund Committee meeting. We urge them to do this!

It’s not divestment yet, but it’s a step in the right direction. Let’s hope they do the right thing tomorrow!

County Bars Citizens from Committee Appearance

Individuals and Groups Condemn Lack of Local Democracy

The twenty individuals and groups who applied to speak at the next Oxfordshire Pension Fund Committee meeting are angered by the county’s refusal to let them speak at the meeting.

The committee’s response to warnings about the risks of investing in fossil fuels has been completely inadequate” said Al Chisholm, Fossil Free Oxfordshire. “Refusing to let anyone address the committee is evidence that, once again, they prefer to kick the issue into the long grass. Written representations, like all our previous communications, will simply be ignored. The economic risks relating to climate change are developing almost daily and citizens ought to be able to make a timely representation on this issue.”

The Pension Fund Committee will be discussing their Environmental and Social Governance Policy at their meeting on 10th March, but the draft includes no mention of climate change. The Government has said councils must take climate risk into account and consult pension scheme members. Oxfordshire has not done this.

An unprecedented number of local individuals and groups submitted requests to address the pension committee, headed by Councillor Stewart Lilly. They plan to call for the long-overdue divestment from fossil fuels, following the lead of many other institutions, including Brookes Oxford Brookes University and Oxford City Council.

“The issue of where local government pensions are invested is one that affects all of us,” said Local Government Pension Scheme (LGPS) member Jill Green.  “We have important facts to present.  In a democracy, our representatives should make it possible for us to speak up!”

The reorganization of local government pension funds into eight groups across the UK is the perfect time for Oxfordshire County Council to pull over £55 million of employee funds out of unstable fossil fuel investments. This transition presents Oxfordshire with a unique opportunity to divest. The county pension fund should no longer invest in companies that are driving climate change. Instead, it should be invested more ethically, sustainably, and profitably.

“We’ve witnessed the hottest years on record, unstable weather incidents – from heavy rains and floods in Oxfordshire to hurricanes and droughts elsewhere – sea levels are rising, even the Arctic and Antarctic are melting,” said Andrew Finney, PhD, “What more proof that we are facing a growing climate crisis does the county pension fund committee need?”

To add to this, oil and gas investments have been underperforming in recent years.

“Responsible stewardship of the money that so many local government employees will depend on during their retirement years requires divestment from fossil fuels,” Peter Wallis, LGPS member and council employee. “It’s becoming as simple and obvious as that!”