Cambridge City Council frustrated as Cambridgeshire Pension Fund refuses to divest £57m in fossil fuels

Cambridge City Council was left frustrated this week following the refusal of pension fund holders to divest from fossil fuel investments.

Cambridgeshire Pension Fund has a £3.3bn investment portfolio of which 1.7 per cent – £57m – is invested in companies involved in fossil fuels.

The pension scheme is for the benefit of staff at the county council, Peterborough City Council and the five district councils in the county: Cambridge, South Cambs, East Cambs, Fenland and Huntingdonshire. There are 330 other employers with staff in the scheme including school academies, catering companies, cleaning companies and housing associations.

The fund has 27,800 active members – current staff paying into the fund – and 61,700 former staff who have retired, or have left and deferred using their pension pot.

In February, the scale of the fossil fuel funds – direct investments in big oil – was revealed.

City councillor Richard Robertson (Labour, Petersfield), a trustee of the fund, responded to an inquiry from the Cambridge Independent, saying on February 24: “I asked the pension scheme last night to provide an update on the investments in fossil fuel companies and also to distinguish direct from indirect investment. Trinity [College] have a pledge on both but it’s a much longer timescale for indirect investments.”

This week (April 19), Cllr Robertson says he “subsequently I brought things to a head with the trustees at the their meeting” but the request to divest the Cambridgeshire Pension Fund of its big oil assets failed to get support.

The trustees’ meeting took place on March 25. The proposal by Cllr Roberston was that the fund should take the ‘in-principle’ decision to divest from all companies working in the fossil fuels sector. However, the proposal was not supported by any of the other trustees.

“The pension fund’s trustees have been concerned for some time at the risk to the fund as well as the world from climate change. There has been much discussion about engagement rather than divestment in relation to fossil fuel companies but it has become apparent that this has not led to change to sustainable energy at a fast enough rate,” said Cllr Robertson.

“At the March meeting of the trustees I proposed that the fund should divest from investment in fossil fuel companies with effect a soon as possible. As the agenda included a review and restatement of the fund’s Responsible Investment strategy, I also proposed that the policy should include divestment from fossil fuel companies.

“However none of the other trustees would support either of my proposals so it fell. It was apparent that the trustees felt that engagement with oil and coal companies would be more effective than divestment.

“In making the proposal I pointed out that divestment was increasingly being chosen by trustees of funds, including some very large funds such as the Norwegian Sovereign Wealth Fund, NEST, and recently Trinity College Cambridge.

“I also pointed out that the extremely successful investment company, Blackrock, had only days earlier announced that their research showed that ‘divestment from fossil fuels improves, not weakens, investment returns’. This means that investment in fossil fuel companies is not only helping them continue to damage the world by fuelling climate change, but the trustee’s obligation to provide the fund with a good return on investment, was also being undermined.

“Giving these reasons for divesting from fossil fuels I asked for support from the other trustees which include two Liberal Democrat county councillors as well as four Conservatives but regrettably not one of them would even second the proposals and several spoke against the whole idea.

“The proposal was for an ‘in-principle’ decision to divest. As most of the fund’s investment are now managed together with those of another 10 county pension funds, it would have to be agreed collectively by all the funds for the divestment to take place.

“Although the Cambridgeshire fund cannot decide on its own to divest, taking the decision would start the ball rolling and hopefully lead to other counties following suit. It is clear that continued investment in fossil fuels must be ended and reinvested in sustainable energy. However the oil and coal industries have made inadequate steps in this respect.

“I can confirm that the Labour administration of Cambridge City Council is extremely concerned about the threat to our world from climate change and have declared an emergency in that regard. We will do what we can to move the council and Cambridge as a whole to a net carbon zero position.

“The city council does not invest in fossil fuel companies and on behalf of the council and residents of Cambridge I will continue to put pressure on the pension fund to divest from fossil fuel investment.”