03/29/2024

Wales News Online

Local & National News for Wales

Investments in fossil fuel companies unsustainable claims council deputy leader

PENSION fund investments in fossil fuel companies are not sustainable in the long term, the deputy leader of Swansea Council has said.

Cllr Clive Lloyd cited a local Government pension fund in England which he said would “come a cropper” if it did not change its investment policy. “All the industry is saying that,” he said.

Cllr Lloyd was speaking at a scrutiny committee meeting in which he was challenged to accelerate Swansea Council pension fund’s fossil fuel divestment.

His questioner, Cllr Peter Jones, wanted to know if it could pull out of all fossil fuel investments by 2023, not 50% of them as is planned.
Councillors declared a climate emergency six weeks ago.

Cllr Jones said the increased rate of summer ice melt in Arctic regions, combined with more forest fires in places like Siberia and Alaska, had “disastrous potential consequences”. He added: “This is a drastic situation.”

Cllr Lloyd, who is chairman of the Swansea Council pension fund committee, said: “I absolutely get that. It’s hugely relevant.”

But he reiterated that the council pension fund had already made the 50% divestment pledge, and also had fewer fossil fuel investments than the sector average to start with.

Cllr Lloyd said “very few councils” actually went ahead with the sort of commitment made by the Swansea pension fund. He said the fund had moved £500 million – nearly a quarter of its total investments – into a low carbon product at the end of July. “That attracted massive attention in the industry,” said Cllr Lloyd, who also sits on the Wales Pension Partnership joint governance committee. “It was quite unprecendented on this scale.”

He also stressed that local Government pension funds had a duty to get the best returns for the thousands of council workers – many part-time – who paid into them.

Cllr Lloyd said the average council worker’s pension in Swansea was worth £5,000 to £6,000.

The Swansea pension fund increased in value in 2017-18 by more than £60 million, although fees of nearly £6 million were paid out.

Most of the pension fund’s value is in overseas and UK shares.

The deputy leader also said he wanted the fund’s managers to continue engaging with companies to encourage behavioural change. “Will we do more, and will we do it faster?” said Cllr Lloyd. “I think that’s a legitimate discussion. “But I think we are far further ahead than a lot of other councils.”

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