We continue the serialisation of our report, Policies for the City Region. In this short installment we explore the ethical necessity and pragmatic benefits of NW institutions dumping their investments in fossil fuel companies and putting that money to better use, for example in the local, social and/or low carbon economy. And there’s plenty more to come! But if you can’t wait: download it here. You can also see out policies page HERE and our publications page HERE. The party manifestos for the GM mayoral election are out. See how much overlap you can find with our proposals (hint: there is quite a bit in at least two of them).
3 Divest from fossil fuels.
Policy 3.1: The Greater Manchester Pension Fund (a significant financial “anchor institution”) redirecting a sizeable proportion of its £1.3Bn fossil fuel investments to the local economy, with emphasis on environmentally and socially beneficial areas that yield a return to continue its primary responsibilities of paying pensions.
The thinking behind it:
This policy focusses on the Greater Manchester Pension Fund (GMPF), the largest local authority pension fund (also providing pensions for some other employers). It has a portfolio of investments, used to fund its pension commitments, of which approximately 10% are in companies primarily concerned with the extraction, processing and distribution of fossil fuels. There are two principal aims of this proposed switch in investments.
Climate change requires assertive action to leave most fossil fuel reserves un-exploited. Yet the fossil fuel companies continue to invest in exploration. “Engagement”, or efforts to directly persuade these companies to stop exploration, have not yielded any significant results. An international campaign1 is encouraging investors to move their money out of the fossil fuel companies, thereby sending a strong signal to the markets, reducing the money available for further climate damaging fossil fuel extraction and incidentally securing the value of assets against their being stranded as a result of global action on climate.
The GMPF holds around £1.3Bn for potential re-investment. It can be directed to socially and environmentally positive, or at least benign, investment especially in Greater Manchester itself. A responsibly managed programme of divestment and reinvestment could have a catalytic impact regionally, especially if it was deployed to projects like pump-priming a regional public bank and to the (LCEGS) sector discussed under policy 1.41 above.2
Policy 3.2: Other anchor institutions to divest from fossil fuels.
The thinking behind it:
Manchester Metropolitan University has already divested from fossil fuels but as we will see in the next section, there are other key institutions3 in the region that can have a significant impact on our society and economy. If fossil fuel divestment is needed then all institutions should be doing it, multiplying the environmental, economic and social benefit.
…..to be continued, or if you want it now, download here: https://steadystatemanchester.files.wordpress.com/2017/03/policies-for-the-city-region-the-longer-version-v3-final.pdf
2For a detailed briefing see Fossil Free Greater Manchester (2016) What councillors need to know about the Fossil Free Greater Manchester campaign for fossil fuel divestment. http://fossilfreegm.org.uk/wp-content/uploads/2016/12/FFGM-Councillor-Briefing.pdf
3Not least the University of Manchester which despite still hosting the world leading Tyndall Centre on Climate Change, has yet to divest.