Lothian Pension Fund’s investments in fossil fuels has increased by £64 million – almost 40 per cent – since last year, according to new research by Friends of the Earth Scotland.
New data shows that Lothian Pension Fund (LPF) is currently investing in BP, Chevron, Exxon, mining company BHP, and Shell – one of the owners of the Cambo oil field, situated off the coast of Shetland, which campaigners are opposing. LPF’s investments in fossil fuels now amount to £229m, they claim.
Ahead of the COP26 climate change event in Glasgow, environmental groups have condemned LPF for “failing to show leadership” by not ending investments in firms allegedly “destroying the planet”.
LPF said in reply the numbers were “overstated materially” and that it “should not be surprising” the value of its energy holdings is higher than in 2020 because “stock prices have risen by more than 65 per cent over the last 12 months”.
LPF is Scotland’s second largest council pension scheme, administering the pensions of over 84,000 members from the City of Edinburgh Council and three other councils in the Lothians.
LPF has been the target of environmental groups in recent years over some of its investments. Campaigners have been asking LPF – and other Scots council pension funds – to drop investments in fossil fuel companies, and re-invest the money in ethical alternatives.
Climate activists from campaign group Divest Lothian staged a protest outside Edinburgh City Chambers this week to demand that the fund, run by City of Edinburgh Council, ends investments which, they say, are fuelling the climate crisis.
Campaigners pointed out that since The City of Edinburgh Council pledged to become a net-zero carbon city by 2030, LPF has continued to profit from some of the coal, oil and gas companies which they allege are “most responsible for the climate crisis”.
According to Friends of the Earth Scotland, the Cambo oil field, which Shell is involved in, contains 800 million barrels of oil which, if burned, would create pollution equivalent to “10 times Scotland’s entire national climate emissions”.
Iain Struthers from Divest Lothian said: “It is deeply inconsistent and morally unjustifiable that Edinburgh City Council is positioning itself to be a zero-carbon city by 2030, but with no mention of divesting its interests in fossil fuels.
He added: “Stakeholder engagement will never change the core business model of polluting companies. Divestment is an essential step to accelerate the just transition to a sustainable future for all.”
Sally Clark, divestment campaigner with Friends of the Earth Scotland, said: “The Lothian Pension Fund is directly invested in the continued search for fossil fuels through its £229 million investment in companies like BP, Shell and BHP. This is undermining the City of Edinburgh’s commitment to tackle the climate crisis.”
She added: “As Scotland prepares to host the COP26 in less than a month, Scottish councils have a vital opportunity to show climate leadership. Similar funds such as the Cardiff, Lambeth and Waltham Forest pension funds have already committed to go fossil fuel free and it is now time for Lothian Pension Fund to join them.”
A spokesperson for LPF said the fund “fundamentally disagrees with the position of divestment campaigners” adding that it favours a policy of engagement with companies as opposed to divestment of shares.
“Divestment campaigners think that selling shares changes carbon emissions and that companies disappear,” the spokesperson said. “That is simply not the case.
“Reduced emissions are achieved by changing company strategy, government policy and individual choices. The fund is concentrating on real world decarbonisation outcomes, not virtue signalling.”
LPF owns a “higher percentage of assets in renewables” than it does in traditional fossil fuel energy companies, they claimed. “What we know about the transition is that it will be long and complex. Fossil fuels will, in fact, be required in significant quantity to effect the transition that we all want.”
The Ferret reported last month that the UK Government was “confident” that the controversial Cambo oil development could go ahead without breaching climate targets.
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