I recently chaired an online seminar of Parliamentarians to discuss whether the pension fund for MPs and Ministers should dump all its remaining holdings in fossil fuels. If you have a pension then it is worth asking the same kind of questions about how your money is being used.
To contain global heating to 1.5°C as outlined by the Paris Agreement, the International Panel on Climate Change have specified that global greenhouse emissions levels must be halved by 2030, followed by continued marked reductions to reach ‘net zero’ global emissions by the middle of the century.
Much of the debate within the pension industry has been about using shareholder power to nudge the fossil fuel producers towards investment in renewables. My job as chair was to nudge the discussion towards dumping all pension fund investments in fossil fuels and to influence the industries that still use fossil fuels to switch urgently to alternatives.
The UN states that for a 1.5°C-consistent pathway, the world will need to decrease fossil fuel production by roughly 6% per year between 2020 and 2030. Indeed, if we are to have any hope of avoiding ecological tipping points then we must reduce production, with half of the world’s largest listed oil and gas companies facing cuts of 50% or more by the 2030’s.
Big reductions in oil and gas are going to hit share prices, so it is far safer to get out of them now and focus investments in those industries that will prosper as part of a new green deal.