Divest Hackney blasts ‘shocking’ rise in council’s fossil fuel investments – after nine-month wait for figures

Divest Hackney has been campaigning for three years. Photograph: Divest Hackney

Campaign group Divest Hackney has blasted the council after discovering its investments in the “destructive and reckless” fossil fuel industry have risen almost 80 per cent in two years.

After a nine-month wait following a Freedom of Information request about the council pension fund’s exposure to oil, gas and coal companies, the group has revealed it now sits at £75 million – up from £42 million in 2015.

But a spokesperson for Hackney Council said it has “reduced the number of fossil fuel stocks owned through its active mandates by 57 per cent since January 2016”, and that the rise is due to the value of its existing stock going up.

Divest Hackney’s Martin Jacobsen said: “Despite making a commitment to reduce their fossil fuels investments by 50 per cent over six years, their investments in this destructive and reckless industry have increased from £42 million to £75 million.

“This is shocking and we won’t stand for it.”

Jacobsen said Hackney should be “stepping up its commitment to divest, not betting more and more money on oil, gas and coal companies”.

The council confirmed that, as at 30 September, the figure of £75.2 million is correct.

A spokesperson previously put the number at £67.7 million, but said this was for “holdings in fossil fuel stocks, which we would define as oil, gas and pure coal producers”.

They added: “Divest Hackney made a slightly different request, asking for the value of our holdings in a list they provided of the top 200 companies by exposure to reserves.

“This list also included a number of large, diversified mining companies, which are generally classified under ‘Metals and Mining’ and so would not have been included in the previous response.

“This sector includes both companies that engage in coal mining and those that do not. The figure quoted under the new methodology is £75.2m, again as at 30 September 2017.”

Divest Hackney protestors

Campaigners at a protest outside the Town Hall earlier this year. Photograph: Divest Hackney

A spokesperson for Divest Hackney said: “It even gets worse. Looking over the investments, it appears that Hackney has £27,507,162.21 invested in Shell, a company whose practices in Nigeria have led Amnesty International to recently call for a criminal inquiry.

“It’s their largest fossil fuel investment and represents 2 per cent of the fund’s total investments.

“When we started this campaign three years ago, our aim was to get rid of £42 million in fossil fuel investments.

“We knew it was going to be tough but we believed that the council would do the right thing. None of us thought that their investment would almost double right under our noses.

“We’ve seen other councils in the London commitment to 100 per cent divestment. We know it’s possible.”

On Shell, the council spokesperson added: “The majority of the fund’s investment in Shell is held indirectly, through a passive index tracker fund, which tracks the performance of the FTSE Allshare and therefore provides broad exposure to the UK economy.

“We have maintained a 20-25 per cent holding in this fund for over 10 years, but have committed to reduce this to 10 per cent as part of the April 2017 Investment Strategy.”

The remaining £1.5 million of Shell holdings are “owned directly”, the spokesperson confirmed.

When asked if the council has the power to prevent its pension fund investing in certain companies, they added: “The guidance states that the precise choice of investments may be influenced by wider social, ethical or environmental considerations, so long as that does not risk material financial detriment to the fund.

“However, the administering authority should not seek to impose its particular views where those would not be widely shared by scheme employers and members.

“Given these caveats, the council does not consider that it has sufficient grounds to exclude Shell from its investment portfolio, particularly given its significance within the FTSE Allshare.”

The spokesperson said “it is not pension fund policy to disinvest in particular stocks on grounds other than financial”, adding: “Instead we seek to engage with those companies in which we invest on ESG matters, particularly through our membership of the Local Authority Pension Fund Forum (LAPFF).”

LAPFF is a group of 72 funds committed to “ensuring that companies have the right policies and right people in place to create value for shareholders over the long term”.

On its website, the forum says issues such as climate change and employment standards “require as much investor attention as more traditional concerns such as corporate governance and executive remuneration”.

Last month, Cllr Robert Chapman, chair of the Town Hall’s Pension Committee, said: “Hackney Council has a strategy to reduce its pension fund’s exposure to fossil fuel investments.

“The fund’s long-term ambition is to move away from fossil fuel investments, and I can foresee a time when our fund will have no fossil fuel investments.”

5 Comments

  1. Graham Hall on Friday 15 December 2017 at 16:20

    So do the Members of divest Hackney use Electricity and or Gas in their homes or offices, do they buy petrol or diesel for their vehicles, do they travel my rail sea or air? All of these things use fossil fuels and its hypocritical to use the products and then claim that nobody should invest in the companies that supply them. And lets face it, most of the good people of hackney do use these products , indeed their quality of life depends upon it. So do divest hackney want to make Hackney citizens poorer and reduce their standard of living? Because that’s what their campaign really is trying to do.



  2. Al Binnie-Lubbock on Tuesday 19 December 2017 at 10:24

    The council should also divest the over £10 million it has invested in arms companies. I’m pretty sure most of the scheme’s employers and members don’t want to have that blood on their hands either. The climate crisis will lead to more conflict around the world. Investments in fossil fuels fuel these conflicts as climate change creates refugees and resource scarcity and food shortages. Then when we’ve allowed people’s homes and livelihoods to be destroyed we’re making money from the violence that ensues. It’s a stain on the council that claims to be for the people and represent all residents from around the world in our brilliantly diverse borough.



  3. Al Binnie-Lubbock on Tuesday 19 December 2017 at 10:26

    This argument is nonsense. If people stopped investing in these 19th century technologies they would invest in renewable energy resources for the future and solutions that would mean we’re not destroying our ability to survive with a decent standard of living on this planet.



  4. leon sardine on Monday 8 January 2018 at 12:14

    Blairite zombies or zombie blairites? The prevailing ethos of these labour councillors is to refer critical decisions to a ‘market’ paradigm. EG1. Fossil fuel investment: still legal, still profitable, lets do it – even if our kids are being poisoned in their school chairs by pollution. EG2. Lets use public money to enter the speculative housing market, build homes for the 1% in the hope the housing bubble last long enough to build a few council homes with the profits. Never mind if this further inflates the local housing ‘bubble’ (forcing poorer people out), we got some independent consultants (who’ve not indicated a conflict of interest) who tell us this is going to be really good (for somebody).



  5. Martin Jacobsen on Thursday 18 January 2018 at 23:03

    Hi Graham. Thanks for sharing your thoughts. I use Good Energy for my power at home, work within the cleantech sector, try to fly as little as possible, don’t own a car, etc. But regardless, investing in renewable energies makes sense from the point of view of financial returns and the environment. The cheapest source of power in the UK is currently onshore wind turbines. The cheapest source of power in most developing countries is solar. And this is before taking into account the massive tax breaks and subsidies that fossil fuel companies already get, distorting their real market price. Pension funds like Hackney’s investing in fossil fuel companies gives them legitimacy which they use to lie to the public, distort their real credit worthiness, and drill for more oil and gas- when their entire businesses are built on a financial and environmental house of cards. If all fossil fuel companies extract and burn the reserves they currently hold, we will blow the world’s total carbon budget by a factor of five (assuming we want to try and stay within 2 or even 1.5 degrees of global warming, as was agreed in Paris)- which is a stretch given current commitments. That’s why we do what we do and you’re more than welcome to come along to one of our open meetings on Mondays to learn more. Cheers- Martin (on behalf of Divest Hackney)



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