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Parliamentary pension fund invests £36m in renewables but continues O&G investment

Image: Getty.

Image: Getty.

The parliamentary pension fund has been championed for an increase in renewables investment, however investments into O&G companies continue.

The cross-party Divest Parliament initiative is calling on the trustees of the fund to end the investment in fossil fuels, with the 2019 annual report showing the £733 million fund invested £8 million in Shell and £4.4 million in BP.

Green Party MP for Brighton Pavilion, Caroline Lucas, warned the investments “cannot be justified on ethical, environmental or financial grounds”.

“Parliament declared a climate emergency nearly a year ago, and the parliamentary pension fund needs to fall into line with this by ending the support for fossil fuels.”

The fund's holdings in fossil fuel companies have decreased due to the use of low carbon investment vehicles, with the fund now also dedicating 5% of its investments into renewable infrastructure for the first time, helping to build wind and solar farms across the world. This amounts to £36 million for renewable infrastructure.

This has long been called for by the Divest Parliament initiative, which is supported by 360 serving and former MPs, however it is calling for an end of investment in fossil fuels completely.

Think tank Carbon Tracker’s Mark Campanale said that 2020 "must mark a decisive turning point" where trustees of private and public pensions "stop fueling the fire of the climate crisis through their business-as-usual investments in fossil fuel majors".

“Some of these companies present grave risks to people’s pensions as coal, oil and gas risk becoming ‘stranded assets’ as countries align policy with containing global heating to 1.5 degrees and the cost of clean energy continues to plummet," he added.

The fund’s investment in O&G companies has fallen, with its investment in BP falling be as much as 62%.

When contacted by Current± a BP spokesperson highlighted they company's aims of becoming net zero by 2050, which would make it compliant with the UK's own targets. As part of this, it announced a new low carbon power unit, with the O&G major having also amassed a portfolio of investments in clean energy firms including Lightsource BP and BP Chargemaster through its Alternative Energies division.

A spokesperson for Shell similarly told Current± that the company is taking "concrete steps to address" its own carbon footprint with its Net Carbon Footprint ambition, as well as investing in lower-carbon energy options and advocating for smart policy solutions.

“We welcome constructive efforts to work together to advance the energy transition, recognising the pace and scale of collaboration needed to address this global, societal challenge."

Moving forwards, the pension fund is also committed to developing a new 'Climate Change Investment Policy', however Divest Parliament has said the policy has been delayed, with no publication date confirmed.

A spokesperson for the Parliamentary Contributory Pension Fund said: "In common with most large diversified investors, the PCPF currently has financial exposure to a very large number of companies and sectors.

"As set out in their annual review 2019, the trustees have made a number of changes to their investment strategy reflecting the fund’s long term objectives and their beliefs. The trustees have committed to global renewable infrastructure in 2019 and in February 2020, they reviewed the fund’s equity structure and have made these changes to increase focus on the long term sustainability of returns.”

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