Template council motion

The following text can be used as the basis for your local authority to pass a motion in favour of divesting its pension fund.

Fill in the blanks with your local authority’s details, and add any additional information that may be relevant; for instance, if the council has declared a climate emergency.

[Insert Council] Divestment Motion 

[Insert Council] notes:

  • [Insert Council] has around [insert figure from report] invested in fossil fuels via the Local Government Pension Scheme.[1]
  • The United Nations Paris 2015 Agreement commits our governments to keep the global temperature increase to under 2 degrees and aim for 1.5 degrees. Carbon budgets produced by the Intergovernmental Panel on Climate Change, United Nations and the International Energy Agency show that preventing two degrees of warming relies on not burning 60-80% of all proven fossil fuels.
  • With COP26 taking place in Glasgow in November 2021, there is increased emphasis by the UK government on showing global climate leadership, especially in relation to finance. Divesting our pension is a clear and meaningful action that can be taken at a local government level. 
  • Fossil fuel investments are financially risky as a result of both the Covid19 pandemic and the global transition to a more sustainable economic and environmental model. They are now being consistently out-performed by renewables.[2]
  • Former Bank of England Governor Mark Carney warned in December 2019 that fossil fuel investments risk becoming “stranded assets” (i.e., worthless) as investors exit the sector. “A question for every company, every financial institution, every asset manager, pension fund or insurer – what’s your plan?”
  • As continued investments in fossil fuels pose material financial risks to portfolios, funds have fiduciary duties to consider the benefits of decarbonising as part of their investment strategies. Fiduciary duty is defined by the Law Commission as ‘ensuring that pensions can be paid, ensuring that this is undertaken at the best possible value’.
  • Pension funds have a legal duty to treat members “fairly as between them”. That means taking seriously the longer-term interests of younger members who may well be affected more by the climate transition.

This Council commits to:

1. Reviewing its Investment Strategy and developing and implementing a Responsible Investment Policy which rules out new investments in fossil fuel companies. 

2. Calling on [Insert Council]’s Pension Fund to divest from fossil fuels by requesting its representative(s) on the Pension Fund Committee to call for the development and adoption of responsible investment policies which:

a. Immediately freeze any new investment in the top 200 publicly-traded fossil fuel companies.[3]

b. Divest from direct ownership and any commingled funds that include fossil fuel public equities and corporate bonds within [insert agreed number of years given market forecasts].

c. Set out an approach to quantify and address climate change risks affecting all other investments.

d. Actively seek to invest in companies that will reduce greenhouse gas emissions and minimise climate risk. 

3. Recognising that fossil fuel investments should be considered as part of the council’s ‘carbon footprint’ and divesting our pension fund is one of the most impactful steps we can take to reduce our impact on our community and the world.

Footnotes

[1] 2021 figures taken from the report Divesting to protect our pensions and the planet – An analysis of local government investments in coal, oil and gas. Available at: https://www.divest.org.uk/councils

[2] Energy Investing: Exploring Risk and Return in the Capital Markets, Joint Report by the International Energy Agency and the Centre for Climate Finance & Investment, Paris. Available at: https://www.iea.org/reports/energy-investing-exploring-risk-and-return-in-the-capital-markets

[3] As determined by the most recent Carbon Underground 200 list.