Each new day brings a new embarrassment for Surrey County Council, with their excuses & evasion laid bare as other institutions transition away from fossil fuels.
South Yorkshire Pension Fund has made the laudable and entirely necessary step to make the pension fund carbon neutral by 2030. What does this actually mean for a pension fund, and why is it another embarrassment for Surrey County Council?
Committing to net zero is potentially a much larger commitment than simply divesting from fossil fuels. It means that the entire fund will have a balance of zero carbon emissions throughout its entire investment portfolio within the next decade.
This means that even with investment in other polluting industries - aviation, cement, data centres etc - the fund's portfolio will still balance out to generating zero emissions. So net zero doesn't mean zero fossil fuels, it means balancing the emissions produced. In this case by balancing all the emissions generated by companies within an investment portfolio with ways of lowering emissions, so that the total carbon production of your portfolio equals zero.
BUT - isn't there always a but - the devil is in the details. Carbon neutrality is the goal that every investment portfolio, institution, and business should be aiming for as quickly as possible. But we are accelerating rapidly toward 450ppm atmospheric CO2, at which point highly accurate modelling predicts we will trigger climate systems into runaway feedback loops, accelerating climate breakdown way beyond control. In fact, studies from summer 2020 suggest we may have already passed 9 of 13 critical tipping points. So it is absolutely critical that we begin an immediate transition away from fossil fuels.
This means that a less-than-genuine organisation may cover their fossil fuel use by 'offsetting' carbon production. Coupled with the fact that it is often hard to quantify exactly how much and how efficiently a company truly offsets carbon, this strategy can potentially give license to carry on burning fossil fuels, and accelerating catastrophic climate change, whilst allowing a fund, organisation or company to claim they have green credentials.
The second issue here, is that balancing an investment portfolio for a zero carbon budget means investing in Negative Emissions Technology (NETs). This might be investing in reforestation projects, or companies working on peat bed management and protection. But it also means investing in man-made NETs that don't yet exist, are therefore unproven, and may never actually come good in the fight against the increasingly rapid breakdown of our once-stable Holocene climate - the only period of history in which civilisation has managed to thrive.
So this is a major step forward by SYPA, and absolutely necessary given the fiduciary duty of pensions funds to protect their members' investments by ditching failing fossil fuel shares, and from the moral standpoint that as tax payers we should not be forced to invest in the corporations driving our own extinction.
But the critical first step, before anything else is done, and the largest short-term impact available, is to immediately divest from the fossil fuel companies they hold shares in, and look for sustainable alternatives. So for any pension fund or organisation who is genuinely committing to a net zero target, the unquestionable first step they must take is to sell their holdings in fossil fuels.
WHY IS THIS EMBARRASSING FOR SURREY PENSION FUND
This news is another damning revelation about the scale of absurdity and falsehoods in Surrey Pension Fund committee's refusal to divest from fossil fuels - you'd be forgiven for think they have absolutely no clue what they're talking about!
SPF's two main arguments against selling their fossil fuel shares are:
1. Their strategy is engagement
2. They have to go along with what Border 2 Coast do
Engagement is the 'strategy' (strategy is a very, very generous term here) of investors trying to convince a business to alter its operating model. Fossil fuel companies entire business models are built on extracting every last drop of oil & gas from the planet. On average, they invest less than 3% of their budgets into renewable energy research and development. You don't need to be a pensions expert to see the flaw in thinking that it's a valid strategy to make fossil fuel companies....stop selling fossil fuels.
Onto the second argument, which is where the trouble begins for Surrey Pension Fund. Border 2 Coast is like an amalgamation of pension funds. Most county pensions belong to of one of these 'pension pots' - it allows for larger investment and therefore larger returns than a pension fund might make if it went it alone.
Surrey County Council's pensions fund has repeatedly stated that their hands are tied on divestment, because they are powerless to do anything other than go along with Border 2 Coast's strategy.
But guess what?! South Yorkshire Pensions Authority is ALSO a member of Border 2 Coast, blowing Surrey Pension Fund's argument out the water.
The fact that Surrey and South Yorks are pension-pot-pals, and that South Yorks have committed to carbon neutrality of the pension fund by 2030 highlights 2 possible options....
Either, the Surrey Pension Fund committee is lying to members of the fund by claiming they can't do anything about divestment, OR the comittee doesn't know what they're talking about.
Our guess is a bit of both. For anyone who has watched the behaviour of Surrey Pension Fund committee for any length of time this will come as no surprise. The level of disinterest about where Surrey residents' money is invested, and particularly what happens to that money, is staggering.
In the 12 month period to May 2020, the committee has presided over losses in excess of £50 million by refusing to sell fossil fuel shares. £50 million! Wiped off Surrey residents' retirement plans.
But it gets so much worse. When challenged on these losses, the committee claimed that there was no need for further investigation into these losses, because they 'aren't relevant'. To put this in context, we all know as Surrey residents how much our schools have suffered from cuts made by SCC to our public services. Well £50m is DOUBLE the cuts made in the Children & Schools budget since 2010!!
Let that sink in. The Surrey Pension Fund has lost twice the amount of cuts to Surrey schools since austerity began. Through sheer incompetence and refusal to do what's best for Surrey constituents.
So, to Tim Evans, chair of the Surrey Pension Fund committee, we ask you to explain to every school that has suffered from these cuts, every school employee whose pension money you're haemorrhaging, every child whose future you are placing in jeopardy, that £50 million is irrelevant.
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