Pensions that benefit people and planet
Published: 24 Nov 2023
During the intervening years there have various ups and downs but we have seen a steady decline in the amounts that these pension funds have invested in these industries, companies and sectors.
Amounts invested in fossil fuel companies have reduced from over £1billion in 2017 to £500million in 2021/22. Figures released last month now show that these pension funds in Wales now invest (on average) around 2% of total fund value in fossil fuels. Within that, some are doing better than others with the Cardiff and Vale and City and County of Swansea funds doing better than the others.
You can see how your pension fares here.
It does of course still leave many tens of millions of pounds still being invested in the likes of the big oil companies at a time when we know we need to act immediately in order to avoid runaway climate change.
So there is still progress to be made and work to do.
As mentioned previously, Senedd Members and Welsh Government have signalled their support for the Welsh pension funds to go further and work together to come up with a plan to both decarbonise pensions by 2030 and then hopefully also come up with a strategy to invest in infrastructure projects in Wales thereby helping support projects, jobs and communities in Wales.
Some of that is happening of course but not as much as is possible and there is surely a big opportunity here for all parts of the public sector (Welsh Government, Councils etc) to work with the pension funds to come up with a joined up longer term strategy that would allow these pension funds to invest in projects all around Wales whilst at the same time achieving the necessary rates of return on investment for their actual pension fund holders.
Very encouragingly, the Welsh Local Government Association (WLGA) has organised an event in early December for council leaders and council cabinet climate leads from all around Wales to come together to discuss exactly these points.
Let’s now hope that this event signals the start of a new process whereby councils and pension funds work together to agree a new plan to decarbonise pensions by 2030 (which would bring them in line with existing council plans to reach net zero by 2030).
There is a definitely a win-win-win all around here potentially. Decarbonise pensions within the timescale we need to act on climate change, to come up with a strategy to invest in infrastructure projects in Wales, create new jobs and support the economy, and to safeguard the pensions of the workers who pay into these funds.
There seems to be a real momentum for this change, let’s hope we will soon be able to point to another world leading climate announcement from Wales.