Fife Council: ‘First positive step’ to divesting fossil fuel stocks from pension fund
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Following the unanimous agreement of a motion tabled by SNP councillor David Barratt today [Tuesday], Fife Pension Fund administrators will prepare a report on how public sector retirement funds could be affected by divesting from polluting companies.
Cllr Barratt suggested that the Fund had a duty to do best by its pensioners - and that continuing to invest in fossil fuels was not necessarily in their interests.
"We're all aware of the conventional wisdom that says we should use our investments to influence decisions through a strategy of stewardship rather than divestment," he told Fife's pensions committee.
"But that tide has turned and investments in fossil fuels are exposed to increased risk of being stranded.
"It's time we had a look at divestment as a legitimate strategy."
Today's decision is not an absolute judgement of holding such shares.
Once the report requested by Cllr Barratt has been prepared later this year, councillors are expected to debate the merits of investing in and divesting from fossil fuel companies and then make concrete policy decisions.
Some have expressed concern at the notion that Fife could be backing itself into a corner by withdrawing support for oil and gas companies which are also major Kingdom employers - companies such as Shell, ExxonMobil and Harland & Wolff.
Leven, Kennoway and Largo Labour councillor Colin Davidson said: "We're encouraging companies to come to this area and invest in oil and gas, yet we're looking at divestment."
But the threat of losing valuable shareholders could influence companies that are yet to commit to net-zero carbon emissions. Shell says it will aim to be a net-zero company by 2050, while ExxonMobil is yet to make any commitment of the sort.
Harland and Wolff, meanwhile, will employ hundreds at its newly acquired ex-BiFab yard in Methil to build wind turbine components for the new Neart na Gaoithe windfarm off the coast of Fife.
Friends of the Earth Scotland (FoES) estimates that the Fife Pension Fund has over £70m invested in fossil fuels, both in directly held shares and indirectly through market tracking indexes covering a raft of companies. In addition, FoES believes that these have shed over £2m in value since 2017.
The Fife Pension Fund, which covers council employees, emergency services workers and institutions such as the Fife Sport and Leisure Trust and Fife College, is also far from the first retirement trust to consider divestment.
The UK Government-backed Nest, Aviva and several local authorities in England have agreed to either partially or fully divest from fossil fuel companies, while the Strathclyde Pension Fund on Scotland's west coast has recently agreed to put firms associated with pollution on notice if they fail to commit to long-term green strategies.
David Hansen, Fife branch secretary of the Scottish Greens, welcomed the move as a "very positive first step" in the process.
He said: “We hope that the Fife pension scheme will want to make a decisive move to rapidly get out of fossil fuels entirely and help us all avoid the worst impacts of climate change.”