Today at Full Council, Councillor Chas Booth secured unanimous support for investigation of the City Council getting out of fossil fuel investment. This is why.
My motion today simply called for a report on the feasibility of fossil fuel divestment, so the substantive debate will doubtless happen once that report returns to Committee. I accepted the helpful amendment from the administration which seeks to broaden out the impact of the motion.
Divestment is the opposite of an investment – it simply means introducing an immediate freeze in new investment in fossil fuel companies, and withdrawing investments over a certain period of time – usually 5 years.
There are many good reasons to pursue fossil fuel divestment, not least the imperative to reduce our greenhouse gas emissions. But I’m focused for now on just one reason, and that is the issue of risk. Paul Fisher, deputy head of the bank of England’s prudential regulation authority (PRA), in a speech just last week, warned that those investing in fossil fuel assets could be left “stranded” by policy changes which limit their use. He further warned that these investments “may take a huge hit” in the future. This follows warnings from head of the Bank of England Mark Carney that the “vast majority of [fossil fuel] reserves are unburnable”.
I accept that the council cannot dictate to the Lothian Pension funds what to do, we can merely advise. And that is why my motion merely called for a report, at this stage, to examine the feasibility of divestment. The decision itself will be for the pension committee to make.
I think it would be prudent for the council to listen to the Bank of England on this issue and examine how we can mitigate the risks involved in fossil fuel investments and secure a real fossil-free future for our pension funds.