Divestment Motion
Council notes:
? Medway Council, as part of the Local Government Pension Fund, has around £210 million invested in fossil fuels via the Local Government Pension Scheme.
? The United Nations Paris Agreement, reaffirmed at the 2021 Glasgow Climate Summit, commits our governments to keep the global temperature increase to under 2 degrees and aim for 1.5 degrees. Carbon budgets produced by the Intergovernmental Panel on Climate Change, United Nations and the International Energy Agency show that preventing two degrees of warming relies on not burning the vast majority of all proven fossil fuels.
? The UN International Energy Agency (IEA) predicts that global oil demand will significantly fall by 2030, leading their Executive Director to refer to oil and gas companies as potential ‘junk investments.’ Action by governments to limit carbon emissions will ultimately leave fossil fuel reserves unburnable. It has been estimated that this asset bubble, known as the ‘carbon bubble’, may be over €1 trillion in Europe alone.
? Former Bank of England Governor Mark Carney warned that fossil fuel investments risk becoming “stranded assets” as investors exit the sector. “A question for every company, every financial institution, every asset manager, pension fund or insurer – what’s your plan?”
? Pension funds have a fiduciary duty to consider the material risks of continued investment in fossil fuels. Fiduciary duty is defined by the Law Commission as “ensuring that pensions can be paid, ensuring that this is undertaken at the best possible value”.
? Pension funds have a legal duty to treat members “fairly as between them”. That means taking seriously the longer-term interests of younger members who may be affected more by the climate transition.
This Council commits to:
a. Immediately freeze any new investment in the top 200 publicly-traded fossil fuel companies.
b. Divest from direct ownership and any commingled funds that include fossil fuel public equities and corporate bonds within an appropriate timescale.
c. Set out an approach to quantify and address climate change risks affecting all other investments.
d. Actively seek to invest in companies that will reduce greenhouse gas emissions and minimise climate risk.
3. Recognising that fossil fuel investments should be considered as part of the Council’s “carbon footprint” and divesting our pension fund is one of the most impactful steps we can take to reduce our impact on our community and the world.
Minutes:
Divestment Motion
Council notes:
? Medway Council, as part of the Local Government Pension Fund, has around £210 million invested in fossil fuels via the Local Government Pension Scheme.
? The United Nations Paris Agreement, reaffirmed at the 2021 Glasgow Climate Summit, commits our governments to keep the global temperature increase to under 2 degrees and aim for 1.5 degrees. Carbon budgets produced by the Intergovernmental Panel on Climate Change, United Nations and the International Energy Agency show that preventing two degrees of warming relies on not burning the vast majority of all proven fossil fuels.
? The UN International Energy Agency (IEA) predicts that global oil demand will significantly fall by 2030, leading their Executive Director to refer to oil and gas companies as potential ‘junk investments.’ Action by governments to limit carbon emissions will ultimately leave fossil fuel reserves unburnable. It has been estimated that this asset bubble, known as the ‘carbon bubble’, may be over €1 trillion in Europe alone.
? Former Bank of England Governor Mark Carney warned that fossil fuel investments risk becoming “stranded assets” as investors exit the sector. “A question for every company, every financial institution, every asset manager, pension fund or insurer – what’s your plan?”
? Pension funds have a fiduciary duty to consider the material risks of continued investment in fossil fuels. Fiduciary duty is defined by the Law Commission as “ensuring that pensions can be paid, ensuring that this is undertaken at the best possible value”.
? Pension funds have a legal duty to treat members “fairly as between them”. That means taking seriously the longer-term interests of younger members who may be affected more by the climate transition.
This Council commits to:
a. Immediately freeze any new investment in the top 200 publicly-traded fossil fuel companies.
b. Divest from direct ownership and any commingled funds that include fossil fuel public equities and corporate bonds within an appropriate timescale.
c. Set out an approach to quantify and address climate change risks affecting all other investments.
d. Actively seek to invest in companies that will reduce greenhouse gas emissions and minimise climate risk.
3. Recognising that fossil fuel investments should be considered as part of the Council’s “carbon footprint” and divesting our pension fund is one of the most impactful steps we can take to reduce our impact on our community and the world.
In accordance with Rule 12.4 of the Council Rules, a recorded vote on the motion was taken.
For – Councillors Adeoye, Cooper, Curry, Edwards, Howcroft-Scott, Johnson, Khan, Lloyd, Mahil, Maple, McDonald, Murray, Osborne, Paterson, Pendergast, Price, Sands, Chrissy Stamp and Van Dyke. (19)
Against – Councillors Ahmed, Aldous, Barrett, Brake, Buckwell, Carr, Mrs Diane Chambers, Rodney Chambers OBE, Chitty, Clarke, Etheridge, Fearn, Filmer, Griffin, Gulvin, Hackwell, Jarrett, Kemp, Lammas, Potter, Purdy, Tejan, Thorne, Tranter, Mrs Elizabeth Turpin, Rupert Turpin, Wildey and Williams. (28)
Note: In addition to the Councillors named in the minutes of agenda item no. 2, apologies for absence, Councillor Hubbard was not present for the recorded vote.
Decision:
Upon being put to the vote, the motion was lost.