Talking Climate over a Cuppa
By Lauren Peacock, Campaign Organiser, ShareAction
At the beginning of 2017, I set off on a trip to meet ShareAction’s pension power network. My role at ShareAction is to support pension savers to take action on how their pension is managed and invested. Over tea and cake, pension power members and I discussed how to overcome the black box which is the investment industry and engage others to join the movement. We want pension schemes that listen to members, are well governed and invest well. My tour sought not only to sample the best brew the North had to offer, but to find out how members are encouraging their funds to invest well. Investing well means pension funds monitor the practices of their investee companies and engage on issues such as climate change, the living wage, antibiotic usage and renewable energy. Effective engagement should mean companies are held to account on these issues and divest when appropriate.
“Climate risk refers to the financial risks that climate change causes. They can be physical, such as the impacts of extreme weather and flooding. They could also be legislative, such as the risk that pension funds’ investments become a lot less valuable because of legislation combatting climate change”
The focus of my tour was climate risk, an area where ShareAction is working to support funds to invest well by encouraging them to better consider the social and financial impacts of climate change. We have been working in partnership with Client Earth to educate pension funds that it is their legal responsibility to protect members’ savings from climate risk.
So what is climate risk? Climate risk refers to the financial risks that climate change causes. They can be physical, such as the impacts of extreme weather and flooding. They could also be legislative, such as the risk that pension funds’ investments become a lot less valuable because of legislation combatting climate change. The most significant piece of legislation in this field is the Paris Agreement, which aims to strengthen the global response to the threat of climate change by keeping global temperature rises well below 2 degrees Celsius.
Because of this agreement, a high percentage of existing fossil fuel reserves cannot be burned if we are to stay within the limits set by the Paris Agreement. This means that these assets run the risk of losing value. If a pension fund is invested in fossil fuels, that’s your pension losing value! We are asking pension funds to be proactive on climate risk through undertaking an assessment of their portfolio, and actively engaging with investee companies on climate change as part of their responsible investment approach.
The best cakes in Yorkshire
My tour began in Bradford, with a group of inspirational individuals and a room full of ideas. This group of Pension Power members and fossil free campaigners is getting increasingly successful at reaching important players at the West Yorkshire Pension Fund (WYPF). Predominantly, members want pension funds to invest well and tackle climate risk. As a way to highlight climate risk to WYPF, members have called on Bradford Council and WYPF managers to ‘divest’ from their £671 million fossil fuel investments. They have galvanized support for their campaign by reaching 1000 signatures on their petition. ShareAction views divestment as one of many approaches to take when engagement with companies is unsuccessful. West Yorkshire has experienced devastating flooding in recent years making the impact of climate change increasingly apparent to local residents. We made plans to build an installation of a Noah’s Ark fuelled by renewable power, to get people’s attention and grow the already established team of campaigners.
“I met some incredibly inspirational and motivated people on my journey. We are still far from achieving our goals, but after meeting the amazing people working to save our pensions and our planet, I couldn’t help but feel optimistic about the road ahead”
Next stop on the tour was Manchester, where the Co-Operative Group is based. Here in the delightful vegan Eighth Day café I met two very well informed campaigners. Both of these individuals worked at the Co-Operative Group, and spoke of a time when the Co-Operative Group was a pioneer in inclusive sustainable business. Our meeting sought to plan how to hold the Co-Operative Pension Fund to account on their recent promises to exclude extractive companies with poor environmental standards. Like many funds, the Co-Operative Pension Fund has chosen engagement as opposed to divestment. We are keen to see them specify their process for engagement, and the consequences for companies who fail to meet engagement requirements. We want a clear report on how the Co-Operative Pension Fund is ensuring its investee companies are transitioning to a 2 degree world through business models which are environmentally and socially conscious. Members plan to regularly meet the fund to hold them to account and improve member engagement.
Overall, I met some incredibly inspirational and motivated people on my journey. We are still far from achieving our goals, but after meeting the amazing people working to save our pensions and our planet, I couldn’t help but feel optimistic about the road ahead.
Originally published at shareaction.org on February 24, 2017.