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County Council candidates asked to back campaign to make councils stop investing in fossil fuels.

January 9, 2017 11:29 AM

All County Council candidates have received a letter from the Energy Democracy Project (EDP) asking them to support the campaign to get their local authorities to stop investing in fossil fuels.

The EDP wants to make this an issue in the local elections in May (2017). It is asking candidates to pledge to work towards their council committing to divest its pension fund from fossil fuel companies over 5 years, and reinvest that money in a more financially and socially sustainable future.

It wants action on carbon risk in council pension funds to be included in parties' election manifestos.

Local government pension funds have invested £14 billion of their holdings in oil, gas and coal. It appears that, as of March 2014 (the latest available figure), Buckinghamshire County Council had holdings of £63 million invested with organisations associated with the oil and gas industry.

Energy Democracy Project points to the problem of "stranded assets". This refers to coal, gas and oil reserves in the ground held by publicly listed companies. Scientists say that between 60-80% of these reserves are "unburnable" if the world is to have a chance of not exceeding global warming of 2°C, to meet the terms of the 2015 Paris Agreement on climate change. If companies are not able to extract this fossil fuel, it could have a serious impact on their business, and their share price.

There is agreement on this from Mark Carney, governor of the Bank of England, President Obama and other economists.
EDP points out that assessing these risks is important for councillors in meeting their fiduciary and legal duties.

LibDem County councillors Avril Davies and Stephen Lambert raised the issue in 2014 when they asked questions to both Buckinghamshire County Council and Aylesbury Vale District Council (AVDC) on the respective councils' investments in coal, gas and oil.

They asked how much in council reserves and pension funds was invested in oil and gas companies, and what consideration, if any has been given to divestment.

In October 2014 AVDC answered the two councillors: "The Council's surplus cash balances are invested only with banks, building societies and other local authorities. None of this was directly invested in the oil or gas industry.

Pension funds.

The reply continued:
"For Aylesbury Vale District Council the administering authority for its pension fund is Buckinghamshire County Council. As of 31 March, 2014, Aylesbury Vale District Council's share of the fund's investments was approximately 5%, equating to £94 million. This makes the total value of the fund's investments nearly £1.9 billion.

The amount of this invested with organisations associated with the oil and gas industry stood at £63 million as at 31 March, 2014. This equates to approximately 3% of the fund's total investment. This was held in equities and bonds.

"At that time the Pension Fund Administrator confirmed that the Pension Fund Committee has not given any consideration to the disinvestment in oil and gas companies."

We are still trying to recover the answer from Buckinghamshire County Council to councillors Mrs Davies and Mr Lambert.