Divestment from fossil fuels is the opposite of investment: any money invested by a person or company in coal, oil or gas is withdrawn by the investor. The divestment movement is growing worldwide and aims to slow the fossil fuels industry as much as possible. The Guardian published a more in-depth introduction to divestment here.
The organisation Fossil Free is based around the concept of divestment. Their “In the space of just 10 weeks…” blog post makes for very welcome reading when one realises how seriously divestment is being taken globally. At home, in the UK, Cambridge, Kirklees, Norwich and South Yorkshire local authorities have all taken steps to reduce their investments in fossil fuels.
Last year, Fossil Free targeted the way in which UK councils invest their constituents’ pension money, since £14bn is sunk in fossil fuels across the UK in this way. In light of this, David SmartKnight created the Divest Cornwall movement, whose Facebook page can be found here. You can add your signature to the petition to lobby Cornwall Council to divest here.
For my part, I contacted Sarah Newton, my local MP and representatives on the local council. I cannot publish their emails here verbatim, but the take-home message, unless I am mistaken, is that the £1.4bn of Cornish pension money invested on our behalf is in a broader, ‘defined benefit’ scheme of which fossil fuel investments are only a part (£65m according to Fossil Free). The council does not necessarily have a say regarding how the money is invested once it is within the scheme. To divest from fossil fuels would be to divest from the entire scheme, at the cost of, to paraphrase an email from a councillor, hundreds of thousands, if not millions of pounds.
Another apparent stumbling block is that the council has a fiduciary (read: legal) requirement to invest pension money in a way that yields “maximum possible return”. On this, at least, there are counter viewpoints, one of which can be found here.
These problems faced by council representatives aside, Fossil Free have also drawn attention to government plans to allow the Secretary of State to veto local authorities’ investment decisions. Is this a good thing or a bad thing? That depends on which decisions you think today’s government would support and which it would not. You may want to make your thoughts known via Fossil Free’s Protect Local Democracy petition page.
In summary, the issues faced by the divestment movement seem to be threefold.
- What pension money Cornwall has which is invested in fossil fuels is bound up as part of much larger scheme(s), most of which is not associated with gas, coal and oil.
- The council have a fiduciary requirement to invest the money in such a way as to get “maximum possible return”.
- The government are considering ways to veto local authorities’ investment decisions.
Can you see any way to get around Cornwall Council’s predicaments? You could also help by spreading the word about Divest Cornwall and signing the on-line petitions.