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More than £10 million invested in fossil fuels by Shropshire County Pension Fund

The chairman overseeing Shropshire’s public-sector pension fund takes environmentally-responsible investing “very seriously” and has promised it will be discussed in detail over the coming year.

Shropshire County Pension Fund has already ordered a “climate risk report” from a regional asset manager which will be discussed in September.

Shropshire Pension Committee chairman Thomas Biggins said this document – commissioned before Shropshire Council passed a motion asking SCPF to divest from fossil fuel companies, including BP and Shell within three years – was “just the start of the discussions the committee needs to have on this important subject”.

That motion, tabled by the Julian Dean, the authority’s sole Green Party councillor, , pointed out that both Shropshire and Telford and Wrekin councils declared climate emergencies last year and pledged to become carbon neutral by 2030, and said fossil fuel investments are “incompatible” with that.

The resolution asked Shropshire Council’s acting chief executives to write to the Pension Fund Committee asking it to “add a statement to its strategy that climate change constitutes financial risks to the fund”, set a three-year timescale for reinvestment and develop a new strategy “consistent with sustainable development goals and developing a local sustainable economy”.

Conservative Cllr Biggins told the committee – which consists of elected members of both local authorities, along with employee and pensioner representatives – said he had not received that letter yet.

He said he took responsible investment “very seriously”, adding: “Over the next 12 months, I will make sure the information contained in the motion is discussed in detail with the pension committee members, advisors and our responsible investment and engagement managers, who are experts in this area.”

Later in the meeting, the committee received a presentation about “climate stewardship” from LGPS Central, an asset manager that works in partnership with SCFP and seven other Midlands local government pension funds.

“The fact that we already have this item on the agenda highlights the important of climate change stewardship and agreement,” Cllr Biggins said.

He added that a “climate risk report” had been commissioned from LGPS, and would be presented at the committee’s next meeting in September.

The document, he said, “is designed to assess SCPF in identifying material climate-related risks and opportunities and estimates the potential impact on returns from different climate risk scenarios”, among other things.

A public question, submitted to the committee jointly by five members of the public, pointed out the SCPF’s 2018-19 annual report “stated that the fund’s BP and Shell investments totalling £27 million”, but Cllr Biggins said, during the debate on Cllr Dean’s motion last week, that they now stood at £10.2 million.

The questioners asked whether shares had been sold or dropped in value.

James Walton, SCPF’s Pension Scheme Administrator, said the fund had asked its equity manager to “rebalance” its portfolio by reducing its investment in those companies.

“The global pandemic has had a significant impact on global equity markets resulting in a fall in share prices globally,” he said.

SCPF manages the retirement savings of employees at Shropshire Council, Telford and Wrekin Council, Shropshire Fire and Rescue Service, town and parish councils and other public-sector bodies.

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