Revealed: Scottish Council Pensions invest £1.2billion in fossil fuel polluters

Scottish council pensions have been revealed to have over £1.2 billion invested in planet-wrecking fossil fuel companies despite widespread declarations of a climate emergency.

None of the 20 Scottish councils that have declared a climate emergency have taken action to end their investments in the coal, oil and gas firms chiefly responsible for driving this crisis. The pension fund schemes are overseen by councillors in 11 local authorities in Scotland. Some councils manage their pension fund not just for their own council area but also on behalf of neighbouring areas.

Strathclyde Pension Fund was the worst offender in Scotland after being found to have £508 million invested in companies such as Shell, BP and Exxon. This is despite Glasgow hosting the UN climate conference later this year and Councillors declaring a climate emergency in May 2019.

The top three recipient companies in Scotland, BP, Shell and BHP, are ranked among the top 20 biggest climate polluters in history, according to the respected Carbon Majors study.

As fossil fuel company stocks have fallen in value in recent years, local councils have lost out. £194 million of value was wiped off the oil and gas investments of the Scottish council pensions between 2017-20 with the Strathclyde Pension Fund alone losing £46 million.

Freedom of information requests by Platform, Friends of the Earth Scotland, and Friends of the Earth England, Wales, and Northern Ireland found that total fossil fuel investments in the UK pension funds stood at nearly £10 billion, an average of £1,450 per scheme member.

Over half of Scotland’s universities have already committed to divest from fossil fuel companies alongside local government funds in Southwark, Islington, Lambeth, Waltham Forest, and Cardiff.

Ric Lander, Divestment Campaigner at Friends of the Earth Scotland, commented:

“With the world coming to Scotland this Autumn to negotiate action on the climate crisis, pension funds now have a clear deadline for addressing their polluting investments. Local councillors have the opportunity to show leadership on climate action by telling fund managers to divest from fossil fuels.

“Many local authorities have declared a climate emergency and have plans in place to bring down emissions from transport, buildings and waste. Pension fund investments are currently working against this progress by continuing to back the ageing fossil fuel economy.

“Scottish council pensions are directly invested in the continued search for new fossil fuels through their ownership of companies like Shell and BP. This drive is undermining efforts to curb the climate emergency here in Scotland and doing untold damage to vulnerable communities around the world.

“Local authorities have the power and duty to ensure local workers have a pension for their retirement, but also a future worth retiring into. Instead of stubbornly sticking with old systems of investment that worsen climate breakdown, councils should boost investment in renewable energy and social housing.”

Ric Lander had this message specifically for decision makers in Glasgow:

“In 2021, Glasgow City Council must challenge their own pension fund to invest for the future. That means councillors seizing the moment provided by the UN climate talks to demand a decisive break from dirty investments. Fossil fuel companies are slowing the transition to a healthy economy and driving a climate crisis that’s harming Glasgow and the world. Glasgow can make a powerful call for justice by joining with the 1,200 institutions across the world who’ve already committed to divestment from fossil fuels.”

Stephen Smellie is Deputy Convenor of UNISON Scotland, who are the largest union representing local government pension fund members. He commented on the figures:

“It is disappointing that the people who manage the pension funds of local government workers are oblivious to the climate crisis that is facing us. Workers care deeply about a sustainable future for their children, and if pension funds consulted with the people whose money they are investing they would know that. Instead, they continue to be part of the climate crisis problem rather than being part of the solution that they could be if they increased investments in sustainable alternatives.

“The value of the fossil fuel investments is high but only a small percentage of the funds’ overall investments so there is no financial justification for maintaining investments in coal, fracking or further fossil fuel exploitation.”

“There is a moral and ethical case for divesting from polluting fossil fuels. But there is also a firm financial case to remove workers’ pension funds from investments that will lose value as the world moves to a low-carbon economy which is less dependent on fossil fuels.”

Robert Noyes, report author and researcher at Platform said:

“After a decade of austerity and the devastating economic impact of Covid across the UK, local councils can and should be using their pension funds to support local investment priorities.

“Instead of making risky bets on fossil fuels, let’s channel the wealth in our pensions to local communities and build a better world beyond the pandemic. Whatever your stake in your pension – imagine what world you want to retire into – and push your pension to invest in it.”

+++ Breakdown of investments by local authority pension fund +++

Local authority pension fund / Fund value (GBP) / Fossil fuel value (GBP) / Fossil fuel (%)

Dumfries and Galloway / 825,599,848 / 31,165,479 / 3.8%

Falkirk / 2,298,923,603 / 97,263,363 / 4.2%

Fife / 2,427,493,675 / 70,102,646 / 2.9%

Highland / 2,114,889,081 / 46,148,656 / 2.2%

Lothian / 7,442,687,000 / 164,691,111 / 2.2%

North East Scotland / 4,404,702,477 / 124,457,073 / 2.8%

Orkney Isles / 450,562,319 / 9,303,106 / 2.1%

Scottish Borders / 716,173,265 / 15,851,755 / 2.2%

Shetland Isles / 459,300,000 / 19,679,134 / 4.3%

Strathclyde / 22,702,413,180 / 508,463,509 / 2.2%

Tayside / 4,013,372,242 / 117,695,060 / 2.9%

Total value of Scottish Local Government Pension Scheme £47,856,116,690
Total fossil fuel value of Scottish funds £1,204,820,892
Average Scottish fossil fuel investment 2.5%