The Strathclyde Pension Fund (SPF) has concluded that divesting from oil and gas firms is not an “effective or satisfactory solution” to climate change in a review of it’s fossil fuel investments.

As reported by The Daily Record, the group has stated that the environmental benefits of carbon fuels are “well established”, despite calls from both a working group, set up by Glasgow council, and industry experts for the scheme to divest from oil and gas.

The fund, which is managed by Glasgow City Council, currently has an estimated £709m invested in fossil fuel companies, new figures published by Divest Strathclyde, Fossil Free Glasgow, and Friends of the Earth Scotland, have also revealed.

Friends of the Earth Scotland noted that the funds’ fossil fuel investments, which are largely unchanged since the last assessment in 2017, could be “embarrassing” for Glasgow City Council, who are due to host the 2020 UN climate talks.

Glasgow City Council have also previously declared a climate emergency and set a target of becoming carbon neutral by 2030.

However, SPF’s report on fossil fuel investments, published in response to the council’s Climate Emergency Group recommendations, stated: “Divestment is a blunt tool – it does not distinguish between those who only own fossil fuel deposits and those who also produce materials essential for the global economy and the transition to renewable energy."

It also highlighted the work already undertaken by the oil and gas industry, saying that Royal Dutch Shell has a 44 per cent stake in solar developer Silicon Ranch and that BP has a sizeable share in solar power provider Lightsource.

The report continued: “In the last two centuries every indicator of human well-being from life expectancy, infant mortality to child labour and education has improved, often dramatically, due to the increased use of fossil fuels.”

The report noted however, that where funds divest, they lose the ability to apply pressure on companies to “clean up” and improve their carbon footprint.

The SPF was previously acknowledged as a Principles for Responsible Investment leader in 2019 alongside four other UK based funds, and has been an Institutional Investors Group on Climate Change member since 2017.

The fund's response to the recommendations is expected to be discussed at a committee meeting on Wednesday, with local councillors in attendance.

Extinction Rebellion Glasgow, Margaux Marshall, commented: “The Strathclyde Pension Fund consistently charts in the two top largest investors in fossil fuels amongst the UK’s public pension funds.

“With the UN Climate talks coming to Glasgow in November, all eyes will be on the city to show climate leadership. We hope this major civic institution will act in the interests of current and future pensioners, as well as for the wellbeing of all, in committing to divest from fossil fuel companies”.

This also follows a challenge from Extinction Rebellion and Friends of the Earth against other Local Government Pension Schemes, as the Clwyd Pension Fund was last week questioned on its £22.4m investment into fossil fuel investments, 1.2 per cent of its total pot.

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