Members of Divest East Sussex

Divest fossil fuels battle continues

The chair of the East Sussex Pension Committee, Councillor Richard Stogdon, has said that he ‘entirely agrees’ that ‘any encouragement to the fracking industry’ – such as investments in ‘fracking companies’ – ‘should be avoided’, as these are ‘not in the best interest of the Council’s pensioners … [or] residents of East Sussex.’ Cllr Stogdon also stated that the Pension Committee would be ‘looking at strategies for reducing – as far as possible – any investment in coal where we see that’s in the best interests of our pensioners.’ [1] Information sent by Divest East Sussex.

As at 30 April 2017 the East Sussex Pension Fund had £2m of local people’s pension monies invested in Exxon, which is involved in a joint fracking venture with oil giant Shell. [2]

Cllr Stogdon made his statements on Tuesday 11 July in response to questions from members of the public at the latest Full Council meeting of East Sussex County Council. Other questions drew Cllr Stogdon’s attention to the Council’s investments in companies such as Imperial Oil, that are currently wasting huge sums exploring for and developing oil fields that, according to recent analysis, are unlikely ‘to deliver an acceptable return’ if the world’s governments follow through on their stated commitment to hold global warming to ‘well below 2 degrees [Celsius] above pre-industrial levels.’ [3]

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 [4]. 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 [5].

Investments in fossil fuels have become increasingly controversial, with over 685 institutions in 76 countries, managing assets worth more than $5 trillion, making some form of divestment commitment since 2012. UK public pension funds lost nearly £700m during 2014/15 when the value of their investments in the coal industry plummeted. [6]

Gabriel Carlyle of Divest East Sussex said: “We welcome the fact that the East Sussex Pension Committee appears to recognise the financial threat to local people’s pensions posed by investments in fracking companies and the coal industry. We hope that this means that they will immediately sell their £2m of direct investments in Exxon and commit to not holding any direct investments in the coal or fracking industries in the future. However, it’s important to stress that, as well as damaging the balance of the earth’s climate, investments in oil and gas companies also pose serious financial risks to local people’s pensions. We therefore urge the County Council to do the responsible and the prudent thing and divest the East Sussex Pension Fund from all of these dirty and risky fuels.”

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, Climate Forest Row and Keep It In the Ground Lewes.

References

[1] Webcast of the Full Council meeting of East Sussex County Council on 11 July 2017, section 4: ‘Questions from members of the public’. Regarding fracking, Cllr Stogdon was asked: “With the unsettled issues as regards the disposal of noxious liquids produced in the fracking process together with the possibility of ground and air contamination and the whole question of the effect of burning fossil fuels on … global warming is it not in the best interest of the Council’s pensioners and indeed all residents of East Sussex that any encouragement to the fracking industry should be avoided?” Cllr Stogdon replied: “I entirely agree.”

[2] ‘East Sussex Pension Fund as at 30 April 2017’, spreadsheet provided by East Sussex County Council under the Freedom of Information Act: What Do They Know.

[3] For wasted investments by oil companies see ‘Five oil majors risking 30% of potential investments on projects ‘unneeded’ in a 2⁰C world’, Carbon Tracker, 20 June 2017 and accompanying report. . For East Sussex Pension Fund’s direct investments in Imperial Oil see the spreadsheet referenced in [2] above. For a statement of commitment by the world’s governments see the text of the 2015 Paris climate agreement.

[4] ‘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.

[5] ‘Campaigners’ joy as Hastings council agrees fossil fuel divestment’: 14 April 2016, Hastings Observer. ‘Lewes Town Council calls for East Sussex Pension Fund to ditch its investments in oil, coal and gas’: 7 March 2017. ‘Brighton Council calls for East Sussex Pension Fund to ditch fossil fuels’: 6 April 2017.

[6] ‘Millions wiped off UK local government pensions due to coal crash, analysis shows’, Guardian, 12 October 2015,

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