Strathclyde Pension Fund approves fossil fuel divestment standards

Strathclyde Pension Fund (SPF) will seek to end investment in fossil fuel companies that fail to meet its standards for reducing greenhouse gas emissions.

As reported by our sister title, Pensions Age, the scheme, which has assets under management of around £24bn and is Scotland’s largest Local Government Pension Scheme fund, has agreed to move forward with the plans after Glasgow City Council approved assessment of energy sector companies in its portfolios.

Members of the SPF Committee agreed to the change following action from activists in Glasgow, who called on the scheme to divest from fossil fuel companies that could damage the environment.

The approved assessment would aim to ensure these companies meet minimum standards to be agreed in consultation with investment managers and environmental, social and governance analysis firm, Sustainalytics.

Any sought divestment will be attempted as quickly as possible while ensuring that there is no detriment to the financial stability of the fund.

Friends of the Earth Scotland divestment campaigner, Sally Clark, commented: “Oil, gas and coal companies’ business model relies on worsening the climate emergency, damaging communities in Scotland and globally.

“Councillors, fund members and concerned citizens will be waiting to see if a possible showdown meeting in September will deliver the definitive standards and timelines that mean actual divestment from fossil fuels.

“Similar funds such as the Cardiff, Lambeth and Waltham Forest pension funds have already committed to go fossil fuel free and the Strathclyde Pension Fund can join them.”

Make My Money Matter CEO, Tony Burdon, said: "We believe every pension fund in the UK must commit to net zero, with a halving of emissions by 2030. We've already seen multiple LGPS', such as Greater Manchester, South Yorkshire and Brunel Pension Partnership, make this vital move, along with other major pension funds such as Nest, Scottish Widows and Aviva.

“Strathclyde Pension Fund’s announcement that they are 'putting fossil fuel companies on notice', while welcome, is far from the urgent action that the planet – and their own members – need.

“The eyes of the world will be on Glasgow during COP26 in November. This will be our last best chance to tackle the climate crisis. 61 per cent of UK pension holders want their pension to actively fight climate change – it would be a huge win for Glasgow if its very own pension fund listened to these voices, and committed to robust net zero targets.”

SPF had previously argued that divesting from oil and gas firms was not an “effective or satisfactory solution” to climate change following a review of it’s fossil fuel investments in April, after Friends of the Earth Scotland called the scheme’s fossil fuel investments “embarrassing”.

    Share Story:

Recent Stories


Podcast: The benefits of private equity in pension fund portfolios
The outbreak of the Covid-19 pandemic, in which stock markets have seen increased volatility, combined with global low interest rates has led to alternative asset classes rising in popularity. Private equity is one of the top runners in this category, and for good reason.

In this podcast, Munich Private Equity Partners Managing Director, Christopher Bär, chats to European Pensions Editor, Natalie Tuck, about the benefits private equity investments can bring to pension fund portfolios and the best approach to take.

Podcast - The power of three: Using Common Contractual Funds to improve tax outcomes for investors
Large asset owners are still investing in equities in a way where they are taxed on their income. The implication is that they get a poorer return. They need to, and can, improve this, but how?

In this podcast, AMX Head of Client and Manager Development, Aaron Overy, and AMX Product Tax Specialist, Kevin Duggan, discuss with European Pensions Editor, Natalie Tuck, about three options to help ensure good withholding tax outcomes for institutional investors.
Mitigating risk
BNP Paribas Asset Management’s head of pension solutions, Julien Halfon, discusses equity hedging with Laura Blows

Europe’s pensions challenges
Francesca Fabrizi meets Matti Leppälä, Secretary General and CEO of PensionsEurope, to discuss the key aims and objectives of the association today.