Agenda item

Alasdair Yule and Elaine Ashley were both present and delivered the Unison joint statement, it is attached as an online appendix to these minutes and a summary is set out below.

Supporting a Fossil Fuel Divestment Policy for Avon Pension Fund.

In September 2019 Unison, along with six other trade unions supported a motion for a “Green New Deal” to build a prosperous zero-carbon society with good green jobs.

This came with 9 key principles:

• a commitment to zero carbon emissions by 2030
• rapidly phasing out all fossil fuels
• large scale investment in renewables
• supporting a just transition to well-paid unionised green jobs
• expanding public democratic ownership
• green integrated transport
• supporting developing countries own climate transitions
• welcoming climate refugees
• preventing displacement.

Pension funds are significant investors in the global economy and therefore hold important significance for how some of these principles can be realised. As the West of England Unison Branches representing over 10,000 members who pay into the Avon Pension Fund, we are committed to seeing the Fund lead by example as an investor in the zero-carbon economy.

We acknowledge the important steps the Fund has taken to account for climate change. This includes; identifying climate change as a long-term risk to the Fund’s assets; monitoring the carbon footprint of the Fund; committing to invest 2.5% of its assets in Renewable Infrastructure Funds and investment in a low carbon fund through the “Brunel Pensions Partnership”.

In setting a 5-year divestment target that takes account of the costs to the Fund over that period the Fund is best representing the long-term financial interests of scheme members, particularly its younger members.

With this target the Fund will support the rapid phasing out of all fossil fuels. In terms of “The Green New Deal” two other things are important.

One is actively investing in a decarbonised, just and sustainable future - it is not enough to just divest from fossil fuels. The Fund should continue to drive genuine impact by setting up “Green Funds” through the “Brunel Pensions Partnership”, that invest in companies helping to achieve a net zero transition including in emerging sectors such as energy efficiency, renewable energy, energy storage and smart energy systems.

The second important point is a focus on justice, not only intergenerational justice, but in securing justice in terms of equitable distribution of the costs of transition for those working in affected industries. Where possible, the Fund should take it upon itself to try and invest in local economic ventures, in well-paid unionised green jobs to replace those lost in the fossil fuel industry. 

Setting a divestment target is a vital next step the Fund should take on the climate emergency, for both its members, and all citizens across the World.

The Chair thanked them both for the statement on behalf of the Committee and said that he hoped the points they had raised would be covered during the meeting.

He added that the Fund objectives are:

(1)  Implement a <2°C aligned portfolio by committing to net zero emissions by 2050 or earlier. This will be achieved by working with Brunel using the results of the industry wide project being undertaken to assess what each 2°C asset portfolio will look like. Expect to review the findings in line with the global stocktake timeline in 2022/23.

(2)  Reduce the carbon intensity of the portfolio over time with the aim of being 30% less carbon intensive by 2022.

(3)  Invest sustainably to support a ‘just transition’ to the low carbon economy with the aim of investing at least 30% of the total assets in sustainable and low carbon investments by 2025.

(4)  Use the Fund’s power as a shareholder to encourage change. Financial markets and companies urgently need to adapt their activities to support the transition to a low carbon economy.  Collaboration as part of Brunel Pension Partnership makes our influence more powerful as they manage a £30bn pool of assets. In addition, the Fund will independently support investor led initiatives such as ClimateAction100+ and Institutional Investors Group on Climate Change to increase pressure on companies and governments to align with the Paris goals.  If engagement does not work ahead of the Paris Stocktake in 2023, we will consider selective divestment from laggard companies.