Shropshire Council will to divest from fossil fuels

A motion tabled by the authority’s only Green Party councillor Julian Dean for the council to push the pension fund towards ending its fossil fuel investments was backed by members at a meeting of the full council on Thursday.

It comes amid mounting pressure from campaign group Fossil Free Shropshire for Shropshire County Pension Fund (SCPF) to divest within three years for both environmental and financial reasons, with demand for fossil fuels shrinking amid the Covid-19 pandemic.

Councillor Hannah Fraser, who represents the Abbey ward in Shrewsbury, said such investments posed a financial risk going forward as more countries across the world move towards net carbon zero with demand for oil and gas, and therefore share prices, sure to reduce further as a result.

She said: “Obviously there is an optimal point to divest from oil and gas when the companies are still making reasonably good returns but they are falling, and investments in renewables are doing better.

“Investors should not wait until oil and gas investments become worthless. The time for divestment is now.”

Councillor Thomas Biggins, chair of the council’s pension committee, said he would be abstaining from the vote. He said BP and Shell, with whom the SCPF invests millions of pounds, had committed to net carbon zero by 2050 and that it was important for investors to use their influence within such companies to encourage responsible practices.

He said: “We believe the SCPF plays an important role in engaging with companies.

“The alternative is to turn our back on this responsibility by divesting and expect others to help drive these changes in our absence.

“If all responsible investors divest their shares and so facilitate ownership of fossil fuel energy stocks by ‘don’t care’ investors, this could result in those companies acting without constraint.”

He added that it was important to remember that Shropshire Council was just one of more than 200 employers for whom the fund administers pensions. Others include Telford & Wrekin Council, town and parish councils and Shropshire Fire and Rescue Service.

Urging members to back his motion, Councillor Dean added: “I think the idea that Shell and BP are moving towards carbon zero at anything like the pace that is required because of investor pressure is laughable.”

The motion passed by 42 votes with no votes against and one abstention.

Following the vote, Fossil Free Shropshire spokesman Jamie Russell said: “We are thrilled by this news.

“Fossil fuel investments are a disaster for the planet and we are immensely grateful to Shropshire councillors for showing real, cross-party leadership on this issue.

“We have always maintained that the fund will be financially healthier without these ethically-dubious investments.

“Hard-working pensioners will enjoy better returns while resting safe in the knowledge that their pension won’t be giving financial support to industries that are wrecking the planet for their children and grandchildren.”

Shropshire Council is one of the largest employers that pays into the pension fund but does not control the fund’s investment strategy.

Mr Russell said: “The next step is for the pensions committee to outline what steps it will take in response to this vote.

“We will be watching the committee’s next meeting very closely.

“We are hopeful that the pension fund will recognise that there is no ethical or financial justification for investing in companies that are destroying the planet.

“Declaring a climate emergency is not just a case of saying the right words. Acting on those words is what counts.

“Future generations will judge us on the choices we make right here, right now.”