Calls to divest pension fund from fossil fuels rejected by county council

Campaigners outside County Hall in Lewes
Campaigners outside County Hall in Lewes

Campaigners took to the streets of Lewes to call on East Sussex County Council to divest its pension fund from the fossil fuel industry.

The protest took place on Tuesday (October 15), as county councillors met to discuss a petition calling on the East Sussex Pension Fund to withdraw its investments from companies involved in the production of gas, oil and coal.

The petition – set up by the campaign group Divest East Sussex and signed by more than 5,000 people – argued such investments are both “damaging the balance of our climate and pose serious financial risks to investors.”

Speaking at the meeting on behalf of petitioners, Green Party campaigner Julia Hilton said: “When the world’s climate scientists declared last autumn that we would need to fundamentally transform our energy sector within a decade, it was clear the first job was to stop building new fossil fuel infrastructure.

“The county council currently invests £145m – four per cent of its pension fund – in the oil and gas companies that are driving our current climate crisis.

“These investments are clearly incompatible with any form of climate emergency declaration. They also pose a significant financial danger to the fund and the council’s current policy of engaging with these companies is not working. 

“Ditching these investments would remove this danger by enhancing the fund’s long term returns and helping to align it with a 1.5 degree world.” 

During the following debate, county councillors discussed several options for how to respond to the petition, including an option to call on the fund to immediately freeze further investment in the fossil fuel industry and to drop its existing investments within the next five years.

Ultimately, however, the council instead backed a motion put forward by the council’s lead member for resources Nick Bennett, which requested “further investigation” into how the fund could further integrate environmental considerations into its investment strategy.

Introducing his motion, Cllr Bennett acknowledged it would be unlikely to satisfy campaigners but argued the council had an “absolute duty in law” to protect the beneficiaries of the fund.

He said: “[The motion] is our attempt to reconcile our determination to do our best as a local authority to address climate change and also our responsibility to all our pensioners – current and future. 

“I hope that you understand our dilemma, although I appreciate it is not welcomed. These are complex issues and our duties require us, when making decisions, to have an understanding of the implications of our actions and, when we do not, to take advice.

“I am afraid that I don’t believe we have sufficient understanding of the consequences of requiring the immediate freezing of new investments in the top 200 fossil fuel companies or divesting from these companies in the next five years.

“I do, however, believe it is proper and appropriate to go to our professional advisors on this issue and specifically on how we can further integrate environmental issues, including those related to fossil fuels, into our investment strategy.”

Other councillors favoured an alternative approach, however, with Cllr Stephen Shing proposing an amended motion calling on the pension fund to immediately freeze and divest,  as proposed by campaigners.

The amended motion also called on the council to note “that the council’s current policy of engaging with fossil fuel companies has been unsuccessful.”

A third approach was put forward by Liberal Democrat group leader David Tutt, which would have seen the county council request that the pension fund to  immediately seek an analysis on the implications of fossil fuel divestment.

However, it would also have the council put on record that it believed the pension fund could achieve either the same or greater returns from a fossil fuel free investment strategy. 

Cllr Tutt also criticised Cllr Shing’s amendment, saying the council would not be able to enforce it as the pension committee was “a sovereign body.”

He said: “Us moving [Cllr Shing’s motion] would be similar to us saying as a county council that we call upon Southern Rail to make sure their trains run on time. However, strongly the sentiment might be felt, the power to actually instruct doesn’t exist.

“What I am seeking to do is acknowledge that the pension fund has already said that there is a strategic risk around fossil fuel investment. 

“To ask – not instruct – the pension fund to instruct its investment consultants to conduct a complete analysis so they can report back, on what I believe they will find, that by divesting they can achieve the same if not a better return for the pensioners they represent.”

Following further discussion, both Cllr Shing and Cllr Tutt’s amendments were voted down with the majority of councillors then voting to back Cllr Bennett’s motion.

Later in the same meeting, councillors agreed to back another motion – put forward jointly by both the council’s Labour and Conservative groups – calling on the authority to declare a ‘climate emergency’. 

As part of motion, the council set itself a target to achieve carbon neutrality from its activities by 2050 or sooner if possible. A Liberal Democrat motion to reduce this target date to 2030 was rejected by the council.