Revealed: Scottish Council Pensions are backing fracking overseas

Scottish Councils invest £972 million of pension fund money in companies fracking overseas according to a report published today by Friends of the Earth Scotland, 350.org and Platform [1]. Across the UK, council pension fund investments in fracking companies totals over £9 billion.

The 12 fracking companies which Councils invest in include ConocoPhillips, BP and Shell, whose fracking operations threaten fragile ecosystems and scarce water supplies, and undermine global efforts to tackle climate change.

Glasgow City Council had the largest investment. It had a £388 million stake through its management of Scotland’s largest council pension pot, the Strathclyde Pension Fund [2].

Investments in fracking appear to be increasing. Across Scotland £35 million more was found to be invested directly in fracking companies than in a similar study in 2017. [3]

Over 60,000 people opposed fracking in last year’s Scottish Government consultation, which lead to a policy of no support for fracking, supported by Labour, Greens and Liberal Democrats in Holyrood. Campaigners are urging the Government to enforce the ‘effective ban’ on fracking through legislation. Through their investments in fracking, Scotland’s councils are profiting from a practice that isn’t permitted in Scotland.

Friends of the Earth Scotland’s Head of Campaigns Mary Church said:

“Opening up new frontiers of fossil fuels like fracked gas whether here or in the US is completely irresponsible in the context of the global climate crisis. The Scottish Government and Parliament oppose fracking because of the serious risks it poses to our environment and health. If fracking is too dirty and dangerous for us here in Scotland we shouldn’t be trying to profit from it taking place in other countries either.

“The pressure will be on SNP, Labour, Lib Dem and Green Councillors on Pension Committees whose parties oppose fracking in Scotland to put in place an investment approach that supports a healthy future for us all, instead of making a quick buck from dirty industries like fracking.”

The investments are held through the Scottish Local Government Pension Scheme which provides pensions for local government and associated workers. These funds are managed by Councillors through Council Pensions Committees.

UNISON represent many members of local government pensions. UNISON Scotland Deputy Convenor and Strathclyde Pension Fund member Stephen Smellie said:

“Using pension funds to invest in fracking is wrong on environmental and safety grounds. Fossil fuels in general and fracking particularly are risky investments given doubts about the financial viability of fracking and the need to reduce the reliance on fossil fuels. There are other better ways to invest our pension funds and Councils should be living up to their climate change obligations, investing in clean energy solutions, not more fossil fuels.”

Which fracking companies?

The report details links between Scottish council pension fund investments and fracking worldwide, including:-

Edinburgh City, Aberdeen City, Dundee City, Fife, Falkirk, Highland, Dumfries and Galloway, Scottish Borders and Orkney Islands Councils invest in Shell, who are planning to spend $2-3 billion a year expanding their global fracking operations detailed in the report. Shell’s fracking operations across Africa threaten scarce water resources, their Canadian operations are opposed by indigenous people and in the USA they have severely weakened government oversight of fracking. 15,000 Dutch citizens are currently taking Shell to court for its contribution to climate change.

Edinburgh City, Aberdeen City, Dundee City, Falkirk, Dumfries and Galloway invest in BP, who boast that they invented fracking, the report states. They are spending $10.5 billion to develop potentially thousands of new wells in the USA, and are pursuing fracking operations in Argentina despite local bans and threats to agricultural land. They were fined $18.7 billion for the ‘gross negligence’ regarding the Gulf of Mexico Deepwater Horizon oil spill.

Glasgow City, Edinburgh City and Falkirk invest in ConocoPhillips, who are planning to drill 10,000 coal bed-methane wells in Queensland, Australia and are accused of operating without a licence in Cesar, Colombia, the report found. Conoco’s fracking operations have been linked with a number of injuries and suspicious deaths, and the company has lobbied to be allowed to frack in the fragile Arctic National Wildlife Refuge, Alaska.

Political support for divestment

Every MP in Edinburgh and Glasgow has pledged their support for divestment from fossil fuels of their own Parliamentary Pension Fund. 15 City of Edinburgh Councillors have pledged support for the Lothian Pension Fund to divest.

Council pension funds in Haringey, Waltham Forest, Southwark and South Yorkshire have begun divesting from fossil fuels, along with the Irish Parliament and Glasgow and Edinburgh Universities. Across the world 899 institutions, with total investments valued at $6.17 trillion USD, have committed to divest from fossil fuels.
ENDS