Motion No. 1
In accordance with Council Procedure Rule No.1.2.11, Councillor Morphet to move the following motion, received by Democratic Services on 3 January 2024:-
To Encourage the Tyne & Wear Pension Fund to Divest From Fossil Fuels
The Local Government Pension Scheme is a national pension scheme for those working in local government or for other participating employers. It’s administered in England and Wales by 86 local pension funds, one of which is the Tyne & Wear Pension Fund (TWPF)¬ -with which Northumberland Pension Fund merged in 2020. The TWPF is administered by South Tyneside Council. The TWPF Pensions Committee is responsible for the control of the pension fund and meets quarterly. It has eight members from South Tyneside Council, one each from North Tyneside Council, Newcastle City Council, Gateshead Council, City of Sunderland Council and Northumberland County Council, three from trades unions and three from local employers.
This Council notes that:
• Climate change poses an existential threat to human civilisation, and the importance of limiting warming to 1.5 degrees Celsius over pre-industrial levels is widely accepted.
• Northumberland County Council declared a climate emergency in 2019, and has set targets for both the council and the county to be carbon neutral by 2030.
• The County Council’s Climate Change Action Plan 2021-23 estimates that hitting these targets will generate 11,000 good green jobs.
• The County Council’s Corporate Plan 2023-26 states that “Everything we now do takes account of the impact it will have on our planet” and goes on to say that “As one of the largest employers in the county, we can become a leading example.. on carbon neutral approaches” and that we can “Provide practical examples of how to become a net zero employer which can be picked up.. by other employers in the county”.
• The burning of fossil fuels makes by far the largest contribution to climate change, accounting for over 75% of greenhouse gas emissions.
• Fossil fuel companies have intentionally delayed action on climate change in order to continue “business as usual”.
• The TWPF currently has at least £461m invested in fossil fuels. This is 5.1% of its total portfolio and well above average for UK local government pension funds.
• The TWPF 2022-23 Annual Report says that the County Council paid £32m in Employer Contributions, effectively investing £1.6m of tax payers’ money in fossil fuels in just one year.
• Investing in fossil fuels is incompatible with the County Council’s climate emergency declaration and carbon neutral pledges.
• In 2015, the Governor of the Bank of England said that the action needed to keep to even 2 degrees Celsius of warming would “render the vast majority of existing fossil fuel reserves stranded” and “literally unburnable”. Fossil fuels are becoming an increasingly risky investment.
• It’s the TWPF’s fiduciary duty to protect its beneficiaries from the effects of climate change by avoiding a) investments that are becoming high risk as a result of climate change and b) investments that exacerbate climate change. Failure to do so will cause a worsening of climate change and an increased investment risk.
• The TWPF could invest the County Council’s Employer Contributions in local initiatives that benefit both people and planet.
• Six pension funds in the Local Government Pension Scheme have already committed to fossil fuel divestment - most recently Wiltshire Pension Fund, which is administered by Wiltshire Council and states that “We do not see a long term place for fossil fuel investments in our portfolios and will work towards being fully divested from these companies by 2030”.
• Dozens of UK local authorities (including Manchester City Council and Cambridgeshire County Council) have passed motions encouraging their local government pension funds to divest from fossil fuels.
• In 2017, UNISON passed a motion to start a campaign for Local Government Pension Scheme fossil fuel divestment.
• Gateshead Council has recently passed a motion asking the TWPF to review their investments in fossil fuels and invest in companies that will minimise climate risk.
• North Tyneside Council has recently passed a motion urging the TWPF to explore the possibility of shortening the timeframe for total divestment from fossil fuels.
This Council resolves to:
• Ask its Pensions Committee representative to encourage the TWPF to divest from fossil fuels completely by 2030.
• Ask its Pensions Committee representative to encourage the TWPF to engage more closely with its beneficiaries on climate change.
• Ask its Pensions Committee representative to provide an annual report on their involvement with the TWPF to the most appropriate County Council committee.