More than one third of MPs have called on pension fund trustees to halt investment in fossil fuels to support a move to a net-zero carbon economy.
The move, made during a debate on the ethical and financial risks of fossil fuel investments by pension funds, saw a third of MPs and 29 former MPs call on their own pension fund to divest fossil fuel holdings.
The cross-party group has asked for the Parliamentary Pension Fund to disclose investments in carbon-intensive industries and commit to phasing them out. In response to the call, the Fund is producing a Climate Change Investment Policy for the £700m fund, which currently holds £11.68m in BP and £10.95m in Royal Dutch Shell.
It comes as fossil fuel companies are on course to increase new oil and gas reserves by 30% in 2019 and commit only 1.3% to clean energy projects, the group claim.
Bank of England Governor Mark Carney, the Environmental Audit Committee and major global fund managers have already warned that pensions are at risk by exposure to overvalued carbon assets as the world moves to cheaper renewables and governments legislate for net zero emissions.
The debate, which was secured by former energy minister and Liberal Democrat MP Ed Davey follows the various warnings, and the announcement of a ‘climate emergency’ by the House of Commons last month – and came ahead of the fourth UK-wide school climate strike this Friday (24 May).
Davey said: “Declaring a climate emergency is the easy part – now we need strong action to make net zero emissions a reality.
“By continuing to invest in fossil fuel firms, we are fuelling the fire of climate breakdown – and risking another financial crash. We must decarbonise capitalism. UK banks and pension funds must stop making the climate crisis worse and urgently switch to investing in clean tech to secure both our planet and people’s future pensions.”
The cross-party group has been lead by Green MP Caroline Lucas, who has been lobbying the Parliamentary Pension Fund to divest its fossil fuels holdings since 2014.
She said: “The worst impacts of climate breakdown are being felt by those who have done the least to cause the problem, as shown by the devastating impacts of Cyclone Idai in Mozambique, Malawi and Zimbabwe. It is morally unacceptable that we are helping to fund this by investing in fossil fuel companies.
“It’s time MPs joined the majority of UK universities, numerous faith groups and a growing number of local authorities in saying we can no longer use our pension funds to gamble with people’s lives and with the future of the planet. The climate emergency demands that all pension funds divest from fossil fuels and invest in positive solutions to the climate crisis.”
Two-thirds of UK universities, a number of councils such as Southwark and Islington, the Greater London Authority and the Irish National Infrastructure Fund have already promised to divest fossil fuel holdings.