Thangam Debbonaire MP and MattWestern MP are among 190 Labour MPs who have backed the campaign to divest the Parliamentary pension fund from fossil fuels and in this article call for positive action to align investment with the Paris Agreement. Thangam is a Labour Whip and Labour MP for Bristol West and tweets at @ThangamMP. Matt is Labour MP for Warwick & Leamington and tweets at @MattWestern_.
The five warmest years since records began in 1880 were the last five years. As the climate heats and unravels, our weather systems are becoming more and more volatile. Those who have contributed least to the problem - located primarily in the Global South - are bearing the brunt of the crisis. Earlier this year, South Eastern Africa faced the devastating Hurricane Idai, killing thousands and displacing millions, and India has recently endured record and fatal heat waves - above 50°C in many cities. In the UK, this year we have already had more wildfires than any year on record, plaguing some of our most cherished landscapes from Cornwall to the Highlands.
These impacts have prompted the IPCC to call for urgent and unprecedented political action to eliminate greenhouse gas emissions. A legally binding net zero target is a positive step forward but achieving this by 2050 doesn’t speak to the urgency of the impacts described above or the UK’s marked historical contribution to global emissions.
Such circumstances have necessitated a wave of urgent calls for action from demonstrators and voters across Europe. In May, Labour led Parliament in declaring a Climate Emergency, a world first, and now we’re actively planning and mobilising for a Green Industrial Revolution.
In these making these declarations and plans it is important to recognise that the fossil industry is the primary driver of the climate crisis. Just 100 fossil fuel companies and institutions are responsible for over 70 percent of all emissions since 1988. This is the same industry that knew about climate change since the 1970s, spends hundreds of millions yearly to buy influence and spread disinformation, and has no plans of changing anytime soon - with just 1.3 percent of average capital expenditure being used to develop clean energy in 2018.
Fossil fuel giants extract inexcusable subsidy from governments around the world - $5.3tn per year. The UK is the worst offender in the EU, funding the industry in the form of billions from government, but also investment through our pensions, university endowments, and investment funds.
This fossil fuel finance must be stopped and instead be reinvested into positive solutions to the climate crisis.
Moreover, a recent paper published in Nature Energy has shown that an additional $458 billion must be invested annually into low-carbon infrastructure and energy efficiency to contain warming to below 1.5 degrees. Public and private pension funds can make a vital contribution to this essential investment, resulting in positive impacts on local homes, businesses and communities.
Divestment is also a question of protecting peoples’ future economic security. Pensions people have worked all their lives to build are heavily invested in the fossil fuel industry and taking action to limit global warming would devalue these investments rapidly. Losses incurred risk matching those of the 2008 financial crisis if our money is not aligned to a fossil free future. Shifting investments into solutions is therefore a prudent move for climate, people and nature.
For this very reason divestment has the support of unions (and the TUC), Labour councils, and voters. Shifting our savings is only one ingredient of a just economic transition, whereby workers in decommissioned industries are supported in reskilling or changing jobs, public funding into home decarbonisation and renewable energy rollout is maximised, and efforts are put into sustainability research and development.
The environment is now consistently amongst the nation’s top three issues, and with parliament gridlocked the public want MPs to show leadership in this area. As well as calling for full divestment of the parliamentary pension fund alongside a majority of Labour MPs, we have written to the trustees for a full disclosure of the fund’s holdings and positive action to align investments with the Paris Agreement. Yet little progress has been made. We believe the trustees require a resounding signal from fund members in order to fully divest. This is why we and SERA are asking those Labour MPs who have yet to sign add their name to the Divest Parliament pledge to ensure that Parliament gets its house in order on the climate crisis.
Unmitigated climate change threatens to undermine our economy, shared environment and global security. Under the UK’s Climate Change Act and the Paris Agreement, the UK is committed to limiting warming to well below 2C and to aim for no more than 1.5C. This requires leaving the vast majority of fossil fuel reserves unburnt, creating the real possibility of fossil fuel assets becoming stranded – with profound implications for the global economy.
We believe Members of Parliament have a responsibility to act on climate change, and a unique opportunity to show leadership on climate action, responsible investment and the management of climate risk through addressing the practices of our own pension fund.
As MPs past and present, and members of the Parliamentary Pension Fund, we call on the Trustees to uphold their fiduciary duty and take the financial risks of climate change seriously. We ask they quantify, disclose and review the fund’s investments in carbon-intensive industries, engage in a dialogue with fund members and managers on responsible investment, and commit to phasing out fossil fuel investments over an appropriate time-scale.