It’s very rare for the Green Group to be guaranteed time for a Full Council debate on any issue. We take a turn a couple of times a year, and the choice of topic is of course a much contested one among the group. I was therefore delighted to be supported when I advocated choosing the future shape of our city’s economy as influenced by the local government pension fund.
Our economy can help create our future, and our savings can stimulate the economy. That’s why I developed a motion for the council to influence the investments of the Avon Pension Fund, specifically to get funds shifted into positive, future sectors and away from the damaging fossil fuels that are undermining out climate.
The debate – called the Golden Motion, due to it being guaranteed time for discussion by all 4 party groups, was recorded and this is what I said: http://bit.ly/1Vd5d5H .
The Motion, as presented to Full Council:
- Cllr Fodor (Green group) to move:
Making Avon Pension Fund a fossil-free fund
This council notes:
- That there is increasing recognition that fossil fuel assets and investments are likely
to become ‘stranded assets’ with 75% having to be kept in the ground to prevent
runaway climate change (ref1).
- Many international experts and investors are warning of the risks of fossil fuel
investments, and at the same time the increasing attractiveness of renewable
energy technologies, with wind power being the cheapest form of onshore
generation now (ref2). Other funds and Universities are increasingly divesting
- The city and its sub region are an area of international expertise in renewable
energy technologies. Locally we are also an area with a very strong track record of
community sustainable energy initiatives, typified by the work of Bristol Energy
Network members, the Bristol Community Strategy for Energy, and the projects
supported by Bristol 2015.
- Bristol Unison branch passed a motion in July for the LGPS to divest from fossil
fuels and then wrote to the chair of the Avon pension fund committee conveying that
decision in July. Pension fund boards have now been established and UNISON has
a seat on the board.
This council recognises that:
- The past industrial and economic base of the Bristol and Avon area was based on
coal and fossil fuels
- The future industrial and economic base of Bristol and surrounding authorities will
be based on energy efficiency and renewable energy technologies.
- The interests of our pensioners will increasingly be served by forward-looking
investments in renewable energy technologies and areas like energy storage and
low carbon solutions, including energy efficiency.
- With many other pension funds divesting and switching to renewables it is time for
Avon Pension Fund to follow suit. The experience of the award winning Environment
Agency PF (a local authority scheme) and other public sector funds are positive
lessons we can draw on (ref4) (ref 5).
This council therefore resolves:
- To ask the Mayor to write to the Avon Pension Fund calling for it to draw up a
strategy to reduce to zero its investments in fossil fuels over the next 5 years,
starting with plans to diversify into renewables, energy efficiency and storage
- To work with other local authorities served by the Avon Pension Fund to work
together on divestment and diversification.
- To work with trades union representatives and the workforce to involve them in
plans for divestment and diversification.
1 Leading experts, including Sir Nicholas Stern, have warned that if we are to stay below a
2°C increase in global temperatures, approximately 75% of the current fossil fuel reserves
have to stay in the ground
Ref 2 At the same time reports from UBS and CitiBank last year highlight that the price of
producing renewable energy is falling so fast, that it is set to compete at market rates with
energy produced from fossil fuels by 2020. In fact onshore wind energy has become cheaper
than energy from any other source in the UK (research by Bloomberg New Energy Finance).
Within the next 5 years therefore, prudent investors need to consider both the stability of
investments in fossil fuels, and the opportunities offered by the rapid growth in renewable
energy. As costs fall for renewable energy, investment returns have steadily improved over the
last few years and are expected to achieve grid parity while many fuel reserves likely to
become unexploitable ‘stranded assets’. Mark Carney, the Governor of the Bank of England
recently highlighted that “financing the decarbonisation of our economy” was a major
opportunity for long-term investors”.
Ref 3 Other major funds include Bloomberg, the Rockerfeller Foundation, and the Council of
Ref 4 Other council (LA) pension funds and public sector funds that have made divestment
commitments include: the Swedish city of Uppsala, the Norwegian Government Pension Fund,
Lund University, SOAS University, and Oxford University. As well as Avon PF, there are
campaigns for divestment in many local authority pension funds, including Oxfordshire,
Greater Manchester, Southwark, Merseyside, West Midlands, Somerset, Cambridge, West
Yorkshire, and Norfolk.
Local government funds have increasingly sought ethical and useful investments such as
affordable housing (Greater Manchester PF); community solar (Lancashire County PF);
community renewables (Strathclyde PF); and Croydon Council’s entire pension fund is in
ethical investments now.
Ref 5: The EAPF (Environment Agency), which is also a Local Authority PF due to the legacy
of waste regulation authorities’ ex staff, has won awards for its growing ethical segment and
shows it can work well, being an LAPF finalist award this year for responsible investment.
Climate risk is seen as an opportunity for the fund. 25% of the fund is due to be in sustainable
and green economy by this year (still to be reported; was 24 last year).It is moving 90% out of
coal stocks and 50% out of oil and gas. It has performed above benchmarks.