New analysis reveals that £194 million was wiped off Scottish council pension funds due to their oil and gas investments crashing over the past three years.

The non-profit organisation, Platform, commissioned Transition Economics to conduct the analysis, which showed that the combined investments by 10 Scottish local government pension funds into leading oil companies, including BP and Royal Dutch Shell, collapsed between April 2017 and November 2020.

The largest losers were Strathclyde Pension Fund which lost £46,374,450, Lothian Pension Fund which lost £36,077,023 and Falkirk Council’s Pension Fund which saw losses of £34,769,723. These amount to losses of £626 per member of the Strathclyde Fund and £429 per member of the Lothian Fund.

In March this year, Strathclyde Pension Fund (SPF) managers argued that they should be allowed to keep investing over £700 million of their members’ pensions in fossil fuel companies such as Shell, BP, Exxon, and Chevron – despite major concerns about the climate impact of these companies and despite Glasgow City Council’s declaration of a Climate Emergency in 2019.

This analysis concluded that, across the UK, local authority pension funds could have lost at least £1.75 billion in value over the past three years as a result of retaining their investments in just nine oil & gas companies.

In 2018 the advisory board for Scotland’s local government pensions began investigating major reform. A full merger was being considered and could improve transparency and make it easier to pursue ethical investments. As this would require legislative change it could be an issue in the 2021 Scottish elections.

Divest Strathclyde is a Glasgow-based campaign for fossil-free local government pensions. Sally Clark from Divest Strathclyde said:

“We have repeatedly presented the Strathclyde Pension Fund with evidence demonstrating the dangers of continued fossil fuel investments and the need to rapidly decarbonise the fund. This loss is the direct result of a conscious failure to act, causing harm to the finances of pension holders by continuing to invest in fossil fuel extraction companies that are poor investments and endanger all our futures through exacerbating climate change.”

“This news is a further demonstration that fossil fuel investments are neither good for the planet nor our pensions. Forward looking pension funds can instead support the transition to a more sustainable Scotland, investing in sectors that will enhance the wellbeing of citizens while ensuring good returns for pensions holders.”

Robert Noyes, Platform, responsible for the data said:
“It is well past time for pension funds to drop oil and gas stocks, both for the climate and their future valuation. Funds like Strathclyde, Lothian and Falkirk lost tens of millions by sticking with BP and Shell. They should have listened to divest campaigners. Instead, the burden is being dumped on the public, pensioners and the Global South.”

Losses of Scottish local government funds

Strathclyde Pension Fund: £46,374,450
Lothian Pension Fund: £36,077,023
Falkirk Council Pension Fund: £34,769,723
Tayside Pension Fund: £30,005,131
North East Scotland Pension Fund: £15,780,431
Dumfries and Galloway Pension Fund: £13,506,338
Highland Council Pension Fund: £11,650,109
Fife Council Pension Fund: £2,356,219
Scottish Borders Pension Fund: £1,968,406
Orkney Islands Council Pension Fund: £1,625,133

Total: 194,112,963

Shetland Islands Pension Fund were excluded from analysis due to lack of data on direct equity holdings in oil & gas companies

Notes to Editors

Original report:
http://transitioneconomics.net/wp-content/uploads/2020/11/TransitionEconomics_Local-Gov-Pension-losses-from-oil-investments.pdf

Scottish losses by percentage value of the total pension fund:
Falkirk Council Pension Fund 1.69 %
Dumfries and Galloway Pension Fund 1.62 %
Tayside Pension Fund 0.88%
Highland Council Pension Fund 0.66 %
Lothian Pension Fund 0.49 %
Orkney Islands Council Pension Fund 0.48 %
North East Scotland Pension Fund 0.39 %
Scottish Borders Pension Fund 0.30 %
Strathclyde Pension Fund 0.24 %
Fife Council Pension Fund 0.11 %

Divest Strathclyde campaign for the Strathclyde Pension Fund to divest from the fossil fuel industry and invest in environmentally and financially sustainable alternatives.

Platform London is a research and advocacy organisation with a focus on energy system change, that supports campaigns to divest local government pension funds out of fossil fuels.

Friends of the Earth Scotland is:
* Scotland’s leading environmental campaigning organisation
* An independent Scottish charity with a network of thousands of supporters and active local groups across Scotland
* Part of the largest grassroots environmental network in the world, uniting over 2 million supporters, 75 national member groups, and 5,000 local activist groups.