Local council pension funds in England controlled by the Labour and Conservative parties together hold £7.5 billion in fossil fuel shares, a new analysis has found.
Environmental campaigners Platform and climate consultancy Transition Economics ranked political parties according to their local council pension fossil fuel investments, finding that Labour-controlled councils hold £3.9 billion in investments in oil, gas and coal, followed closely by Conservative-run authorities, with £3.6 billion.
Councils controlled by the Liberal Democrats have £200 million invested in fossil fuels, while those run by independent councillors not affiliated with a national party held £247 million.
The findings, published ahead of local elections on May 6, appear to undermine a surge of climate commitments made by local authorities in recent years. Some 300 district, county, unitary and metropolitan councils in the UK have declared a Climate Emergency to date, acknowledging the urgent need to adopt policies that mitigate climate change.
Ben Lennon, campaigner and researcher at Platform, said it was “unacceptable” that the two largest parties in England had not moved local government investments away from fossil fuels.
“Divestment is popular with the public, morally right, financially more secure and the common-sense thing to do,” he said. “Councils that ignore this reality are sticking their head in the sand.”
Percentage-wise, the analysis found that councils run by Independents invested the most in fossil fuels (four percent). This was followed by Labour (3.2 percent), the Conservatives (three percent) and the Liberal Democrats (2.3 percent).
The ranking was based on data from Friends of the Earth and Platform released in February, which found that local government pension funds across the UK still have £9.7 billion invested in fossil fuels.
In this new analysis, party responsibility for council pension funds was allocated to the party that controls the council. In cases where no party controls the council outright, the responsibility was split between the parties running the council in proportion to the number of their councillors.
Around 75 percent of councils in the UK have declared a climate emergency, the Friends of the Earth’s analysis points out. In 2019, local councils committed more than £2 million to tackling climate change in response to these declarations, according to an investigation by DeSmog.
However, this amount is dwarfed by the amount councils invested in dirty fossil fuels through pension funds. The Green Party has been calling since at least 2015 for local councils to stop investing their pension funds in fossil fuels, but so far only Southwark, Islington, Lambeth, Waltham Forest and Cardiff councils have done so.
Platform is asking current local election candidates in England to commit to divesting their council’s pension fund within a year of coming into office. Candidates who make this pledge should also seek cross-party support for the commitment, it says.
“Candidates from across the political spectrum should work together to back divestment and create a more sustainable future at the local and international level’,” said Lennon.
Divestment has become an increasingly mainstream tactic to address institutional links with fossil fuels. Globally some 1200 institutions representing $15 trillion have made divestment commitments; with 12 percent of these being pension funds. The MP pension fund has also begun to divest from fossil fuels after pressure from some 360 MPs.
Some forty-five divestment groups across the UK are campaigning for their councillors to divest from fossil fuels, according to Platform. A poll commissioned by Platform from YouGov in March found that 41 percent of respondents support fossil fuel investments by local councils, 12 percent oppose them, and the remaining people are indifferent. This shows the issue of divestment in local councils is not simply a ‘fringe concern’, says Platform.
Campaign groups such as Share Action also encourage people to actively investigate their own pensions and make sure their pension providers are demanding companies stop fuelling the climate crisis.
The local government associations of the Conservative, Labour and Liberal Democrat parties were approached for comment.