Oil industry should ‘put itself on a pathway of “managed decline”‘ – County Council

OIL INDUSTRY SHOULD ‘PUT ITSELF ON A PATHWAY OF “MANAGED DECLINE”‘ – COUNTY COUNCIL
Campaigners hand-in over 2800 signatures calling for County Council to divest local people’s pensions from fossil fuels (oil, coal and gas)

17 October, County Hall, Lewes: East Sussex County Council has stated that it is ‘in the best interest’ of members of the Local Government Pension Scheme for ‘the entire oil industry to put itself on a pathway of “managed decline”‘ [2]. The assertion was made at yesterday’s Full Council meeting, which took place after the hand-in of a petition, containing 2873 signatures, calling on the County Council to divest local people’s pensions from fossil fuels (oil, coal and gas) [3].

Seven members of the public – including former County Councillor Rosalyn St Pierre – also attended the meeting to ask questions about the financial risks associated with such investments and the damage they cause to the balance of the earth’s climate.

Investments in fossil fuels (oil, coal and gas) have become increasingly controversial, with over 680 institutions in 76 countries, managing assets worth more than $5 trillion, making some form of divestment commitment since 2012 [4]. UK public pension funds lost nearly £700m during 2014/15 when the value of their investments in the coal industry plummeted [5].

The East Sussex Pension Fund – which is administered by the County Council and holds the pensions for a wide range of organisations from across East Sussex – is estimated to have at least £150m invested in fossil fuels [6]. Three members of the Fund – Hastings Borough Council, Lewes Town Council and Brighton and Hove City Council – have already passed motions calling on the Fund to divest from fossil fuels [7].

Gabriel Carlyle, a spokesperson for Divest East Sussex, said: ‘We welcome the County Council’s recognition that the oil industry needs to be put on a path of “managed decline”. However, the Council’s current strategy of “engaging” with companies like Exxon and BP is extremely unlikely to achieve the phasing-out of these companies at the speed that’s required if we’re to avoid catastrophic climate change. Indeed, according to the Local Authority Pension Fund Forum: ‘Virtually all the oil majors in Europe (and the US) continue to plan on rising demand for oil and gas and have planning scenarios that reflect this’, with scenarios in which governments take action to limit climate change ‘largely ignored’ [8]. Furthermore, if its current “engagement” strategy fails, the County Council will have retained its exposure to investments whose value could drop rapidly as a result of new climate change laws or emerging technologies like electric vehicles. This is why we continue to believe that divestment from the oil industry – rather than an open-ended and toothless “engagement” with companies like Exxon – is the correct response to these risks.’

Arnold Simanowitz, from Lewes, said: ‘Investments in fossil fuels are not only damaging the balance of the earth’s climate, but also pose a serious financial risk to investors. It is therefore the responsible and the prudent thing to do to divest the East Sussex Pension Fund from these dirty and risky fuels. Once we get 5,000 signatures on the Divest East Sussex petition the County Council’s own rules state that Councillor’s will have to debate the issue [9]. We therefore urge all East Sussex residents to support the call for fossil fuel divestment by visiting http://tinyurl.com/esccdivest and adding their names to the Divest East Sussex petition.’

ENDNOTES
[1] Divest East Sussex is a coalition of East Sussex organisations calling for the divestment of the East Sussex Pension Fund from Fossil Fuels. Members include Fossil Free Hastings (https://fossilfreehastings.wordpress.com), Climate Forest Row and Keep It In the Ground Lewes.
[2] Cllr Richard Stogdon, Chair of the East Sussex Pension Committee: ‘[I]t is in the best interest of the [East Sussex Pension] Fund to get the entire oil industry to put itself on a pathway of “managed decline”.’ See response by the Chair of the Pension Committee to ‘Question from Dirk Campbell, Lewes, East Sussex’: https://democracy.eastsussex.gov.uk/documents/s16418/Item%204%20-%20Public%20questions.pdf
[3] For the text of the petition see: https://campaigns.gofossilfree.org/petitions/divest-east-sussex-pension-fund-from-fossil-fuels. Signatories to the petition include residents of Battle, Bexhill, Brighton, Crowborough, Eastbourne, Etchingham, Forest Row, Hastings, Heathfield, Hove, Lewes, Polegate, Ringmer, Rye, Seaford, St Leonards, Uckfield and Winchelsea.
[4] https://350.org/big-divestment-news/
[5] ‘Millions wiped off UK local government pensions due to coal crash, analysis shows’, Guardian, 12 October 2015, https://www.theguardian.com/environment/2015/oct/12/millions-wiped-off-uk-local-government-pensions-due-to-coal-crash-analysis-shows
[6] ‘Breakdown of equity exposure’ in ‘Climate change, carbon risk and investments’, document circulated by investment consultants Hymans Robertson at the East Sussex Pension Fund training day on 13 June 2017.
[7] ‘Campaigners’ joy as Hastings council agrees fossil fuel divestment’, 14 April 2016, Hastings Observer, http://www.hastingsobserver.co.uk/news/local/campaigners-joy-as-hastings-council-agrees-fossil-fuel-divestment-1-7328414. ‘Lewes Town Council calls for East Sussex Pension Fund to ditch its investments in oil, coal and gas’, 7 March 2017, https://fossilfreehastings.wordpress.com/2017/03/07/lewes-town-council-calls-for-east-sussex-pension-fund-to-ditch-its-investments-in-oil-coal-and-gas. ‘Brighton Council calls for East Sussex Pension Fund to ditch fossil fuels’, 6 April 2017, https://fossilfreehastings.wordpress.com/2017/04/06/brighton-council-calls-for-east-sussex-pension-fund-to-ditch-fossil-fuels.
[8] ‘Engaging for a low carbon transition: Why a 2 ̊C business model is less risky than ‘business as usual”, Carbon Tracker and Local Authority Pension Fund Forum, July 2016, http://www.carbontracker.org/wp-content/uploads/2016/07/Engaging-for-a-Low-Carbon-Transition-v7.pdf
[9] https://www.eastsussex.gov.uk/media/5138/petition-scheme-final-july-2014.pdf

 

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