Recommendations for councils
In a 2016 report by Share Action and Client Earth barrister Frances Lawson stated that as a bare minimum to be consistent with the law, funds must get specialist advice on climate change, assess its impact on their investments and adopt a strategy to deal with the risks identified.
However, we believe it is not enough for pension funds to simply adapt to a world affected by climate change. We need our councils to actively contribute to a better future with a strategy that seeks to build investor power to reduce fossil fuel use and rebalance the economy towards low-carbon solutions.
We recommend that councils which run pension funds should:
- Divest from fossil fuels by adding a commitment to exit these companies over five years to their Statement of Investment Principles.
- Assess the wider risks posed to all companies they invest in from climate change, produce a strategy for low-carbon investment, and require their fund managers to do likewise.
- Talk to funds which have implemented industry standard policy on fossil free investment such as Waltham Forest and the Environment Agency Pension Fund.
- Collaborate with other responsible investors to invest in Scottish communities.
Recommendations for the Scottish Government
Council pensions are run by local government and we do not believe the Scottish Government should instruct councils, unions or staff on how to manage these funds.
However we do believe they could have a role in assisting councils in investing shrewdly in socially and environmentally beneficial infrastructure in Scotland by:
- Setting funds aside to co-fund marginal social housing and renewable schemes, building on the good practice in the Forth Valley housing schemes.
- Develop an investment vehicle or bond which pension funds can invest in, to pool resources and risk for investment in environmentally and socially beneficial schemes in Scottish communities. The Scottish National Investment Bank may have a role.
We would also envisage that the Scottish Local Government Pension Scheme Advisory Board would have a role in developing these proposals.
Join a local divestment group
Local groups around Scotland are campaigning to divest from fossil fuels:
- Fossil Free Glasgow are campaigning for divestment of the Strathclyde Pension Fund. Visit their website.
- Divest Lothian are campaigning for the Lothian Pension Fund to go fossil free. Follow them on Facebook.
- There are also campaign groups working on this issue in other parts of Scotland. Contact us by email to find out more.
Contact your councillor
Thinking of meeting your local councillor? Use the step-by-step guide for lobbying councillors produced by Friends of the Earth Scotland.
 See UNISON Scotland report for more information: http://www.unison-scotland.org.uk/housing/FundingAndBuildingTheHomesScotlandNeeds_Mar2013.pdf