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COMPILED BY:

DIVEST TYNE

& WEAR

LOCAL

ELECTION

RESPONSES

REPORT


FOUR QUESTIONS ABOUT TYNE &

WEAR PENSION FUND: POLICIES OF

LOCAL POLITICAL PARTIES

APRIL/MAY 2022

THE FOUR QUESTIONS

LIST OF FOSSIL FUEL INVESTMENTS

CURRENTLY IN PLACE

GATESHEAD COUNCIL

NEWCASTLE COUNCIL

NORTH TYNESIDE COUNCIL

SOUTH TYNESIDE COUNCIL

SUNDERLAND COUNCIL

ADDITIONAL LINKS

NEXT STEPS

CONTENTS


FOUR QUESTIONS ABOUT

TYNE & WEAR

PENSION FUND

P O L I C I E S O F L O C A L P O L I T I C A L P A R T I E S

A P R I L / M A Y 2 0 2 2

Five of the local authority area members of Tyne & Wear Pension Fund are

holding elections in May 2022. The pension fund invests more than £230

million in fossil fuels and has recently adopted a climate policy that means

it is unlikely to end such investment until 2050.

All five councils - Gateshead, Newcastle, North Tyneside, South Tyneside

and Sunderland - have declared a climate emergency and set targets to

achieve either carbon neutral or net zero emissions by 2030. Links are

provided through the report which carry details of what that target means

and how each council is moving towards it.

Divest Tyne & Wear asked representatives of all main parties fielding

candidates four key questions about their policies on fossil fuel investment

by the councils’ pension fund. This report presents the responses received

to date – it will be updated as more are received.

D I V E S T T Y N E & W E A R P . 1


T H E F O U R Q U E S T I O N S

Question 1: 2030 deadline to be net zero/carbon neutral

Your local authority states on its website that it intends to be net zero/carbon

neutral by 2030. How is the council going to meet that target if its pension

scheme continues to invest in fossil fuels until 2050 (as per its current climate

policy)?

Question 2: investment in fossil fuels

What actions has your party taken in the past four years to reduce your local

authority’s pension scheme’s investment in fossil fuels?

Question 3: future reductions in investment in fossil fuels

What actions does your party intend to take over the next four years to reduce

the local authority’s pension scheme’s investment in fossil fuels? What is your

party’s target figure for that reduction? (NB: the pension fund’s current

investment is approximately £230 million)

Question 4: specific fossil fuel investments by the council’s pension schemes

Following is a list of fossil fuel investments currently in place for the council’s

pension scheme. Please indicate:

Which your party expect to see in place for the next four years

Which your party would like to consider removing within the next four

years

Whether your party has an alternative view of how best to approach

specific investments over the next four years

D I V E S T T Y N E & W E A R P . 2


LIST OF FOSSIL FUEL

INVESTMENTS

CURRENTLY IN PLACE

D I V E S T T Y N E & W E A R P . 3


G A T E S H E A D C O U N C I L

Question 1: 2030 deadline to be net zero/carbon neutral

Labour: Councillor John McElroy, Environment Lead, Cabinet

Gateshead Council has set its own 2030 operational targets in response to the

climate emergency declared in May 2019. Further information on the Council’s

response to climate change is available on the Council’s website which also

includes an update on progress. In relation to the Pension Fund, as a global

investor the Fund would not be able to meet the 2030 date unless most of the

economies of the world could do so.

Green: Andy Blanchflower, Joint Coordinator, Gateshead Green Party

See response to question 3.

Question 2: investment in fossil fuels

Labour: Councillor John McElroy, Environment Lead, Cabinet

See response to question 1.

Green: Andy Blanchflower, Joint Coordinator, Gateshead Green Party

See response to question 3.

Question 3: future reductions in investment in fossil fuels

Labour: Councillor John McElroy, Environment Lead, Cabinet

See response to question 1.

Green: Andy Blanchflower, Joint Coordinator, Gateshead Green Party

The Green Party Policy on Workers Rights can be found here Policies WR452 &

WR 641 relate to pensions. You will note that they say that workers pensions

should be ethically invested and managed. Therefore it is not compliant with

our Policy for Tyne & Wear Pension Fund to invest in businesses of fossil fuel

extraction or processing. Neither is it acceptable for the Fund to invest in

cont.over

D I V E S T T Y N E & W E A R P . 4


G A T E S H E A D C O U N C I L

business that damage health (eg tobacco & gambling), or which destroy

nature/ecology (eg deep trawl sea fishing). We have members who are also

members of the Pension Fund.

Question 4: specific fossil fuel investments by the council’s

pension schemes

Labour: Councillor John McElroy, Environment Lead, Cabinet

The Pension Fund are not in a position to be able to give specific responses for

the companies listed below. In the active portfolios the Fund’s Investment,

managers make the investment decision for each stock based upon a range of

criteria. For the passive portfolios the Investment Manager replicates the

stocks held in a specific benchmark i.e. FTSE100 and so these stocks will be

held as long as they form part of that benchmark.

However, as explained in the Fund’s position on climate change risks [see

Question 1 response], all Investment Managers engage with the companies

they hold including raising climate issues. The companies’ approach and

responses will be a factor in the investment criteria. The response to climate

change is becoming an increasing part of the investment criteria and hence

over time where a company is not preparing an adequate climate transition

plan this will reduce the investment attractiveness of that company.

Green: Andy Blanchflower, Joint Coordinator, Gateshead Green Party

See response to question 3.

D I V E S T T Y N E & W E A R P . 5


N E W C A S T L E C O U N C I L

Question 1: 2030 deadline to be net zero/carbon neutral

Liberal Democrat: Councillor Gareth Kane, Liberal Democrat Group

The Net Zero target originated from a motion proposed to Council by Lib Dem

Councillor Wendy Taylor in April 2019. This motion contained the resolution

“End Council and TWPF investment in fossil fuels within three years.” This

demonstrates we believe divestment is an important part of the Net Zero Policy

– how can we pursue Net Zero if our pensions are dependent on them?

This resolution was amended by the majority Labour Group to read: “Ensure

that representatives on the Tyne and Wear Pensions Fund continue to lobby for

further disinvestment in fossil fuels” and this was the wording agreed by

Council.

Conservative: Connor Shotton, Deputy Chairman (Political) Newcastle

Conservatives

In 2019 the Prime Minister promised to “lead the global fight against climate

change” and deliver on the net-zero target by 2050. Newcastle Conservatives

supports this pledge and backs the plans to slowly reduce our reliance on fossil

fuels as we move to cleaner and greener alternatives.

We also acknowledge the important role that oil and gas still play, and as our

economy adapts and changes we believe that oil and gas companies will still

have a significant role to play as the government work with the private sector

to make these important changes.

In relation to Newcastle’s net zero target we feel it is important that working

families are impacted as little as possible. With the conflict in Ukraine and

changes to energy and food prices we think it’s vital targets are flexible in order

to ensure people can adjust comfortably, without feeling the effects too much.

Therefore, we would urge to Council to rethink their plans and ensure it does

not negatively effect working families in Newcastle, they may need to consider

moving the target beyond 2030.

cont.over

D I V E S T T Y N E & W E A R P . 6


N E W C A S T L E C O U N C I L

Green: Nick Hartley, Local Party Coordinator, Newcastle Green Party

See response to question 3.

Question 2: investment in fossil fuels

Liberal Democrats: Councillor Gareth Kane, Liberal Democrat Group

As explained above [to Question 1], we formally proposed making divestment

Council policy in 2019.

Conservative: Connor Shotton, Deputy Chairman (Political) Newcastle

Conservatives

Under the Conservative government the UK’s offshore wind industry will reach

40 gigawatts (GW) by 2030, and this will enable new floating wind farms,

including in the North Sea with hundreds of jobs being created in the North

East.

The Conservative government have also been supporting gas for hydrogen

production and nuclear energy, including fusion, as important parts of the

energy system, alongside increasing its commitment to renewables. We hope

that in time this leads to decrease in pension scheme fossil fuel investment, but

again I would suggest Newcastle City Council’s target is unrealistic.

Green: Nick Hartley, Local Party Coordinator, Newcastle Green Party

The Green Party has long called for organisations and institutions to divest from

fossil fuels. The Tyne & Wear Pension Fund is particularly galling for people in

our region who want to do the right thing, but feel irresponsibly locked into

climate inaction beyond their control through their pension.

Question 3: future reductions in investment in fossil fuels

Liberal Democrat: Councillor Gareth Kane, Liberal Democrat Group

As demonstrated above [see answer to Question 1], would like to see 100%

divestment and will continue to make the argument for this in Council.

cont.over

D I V E S T T Y N E & W E A R P . 7


N E W C A S T L E C O U N C I L

Conservative: Connor Shotton, Deputy Chairman (Political) Newcastle

Conservatives

Newcastle City Council has secured funding from Government to fund energy

improvement and decarbonisation schemes across various Council buildings,

including schools, leisure facilities and civic buildings. The government have

also invested £500m to help energy-intensive industries move to low-carbon

techniques, all of which we believe will lead to a reduction over the coming

years. At present Newcastle Conservatives have no representation on the

council, if elected we will continue to support the reduction in fossil fuels, as

long as it can be done in an affordable and manageable way. We understand

the need to act and protect our climate, but we must also ensure the poorest in

our communities are protected.

Green: Nick Hartley, Local Party Coordinator, Newcastle Green Party

If Newcastle Green Party Councillors are elected this year, I have complete faith

that they would want to work with you to do what they can to raise divestment

on the agenda. I understand the Tyne & Wear Pension Fund has set 2050 as a

goal for net zero investment. The UN IPCC reports are clear that this would be

far too late. The Green Party’s policy is to reach net zero as a country by 2030,

but that can start with organisations and institutions divesting from fossil fuels

right away. I understand your campaign [Divest Tyne & Wear] calls for a date of

2026 for the Tyne & Wear Pensions’ Fund, a date that is entirely reasonable. It

can be done, and Norway’s Sovereign Wealth Fund is just one good example of

fossil fuel divestment in action. The current war in Ukraine has again shown

how fast institutions and countries can be to act when it comes to divesting

from the Russian market, though sadly our addiction to fossil fuels seems to

have led to inaction where it matters most both for tackling the climate crisis

and ending the way we fund Putin’s war machine.

D I V E S T T Y N E & W E A R P . 8


N E W C A S T L E C O U N C I L

Question 4: specific fossil fuel investments by the council’s

pension schemes

Liberal Democrats: Councillor Gareth Kane, Liberal Democrat Group

We would like to see 100% divestment in fossil fuels and will continue to make

the argument for this in Council. In future the individual cases will depend on

whether those energy companies shift to zero carbon business models, but at

present we would push for divestment as we do not believe any of the below

meet that requirement.

Conservative: Connor Shotton, Deputy Chairman (Political), Newcastle

Conservatives

See response to question 3.

Green: Nick Hartley, Local Party Coordinator, Newcastle Green Party

See responses to questions 1 and 3.

Fossil fuel divestment has emerged as a powerful and important step in moving

towards a safe climate. Divestment also serves as a symbolic statement, and it

pushes global public awareness of the crises we face, whilst forming a valuable

aspect of a multilateral drive for further climate action.

Importantly, divestment can help to shape public discourse and raise public

moral standards. Beyond raising awareness, there is also a moral case for

divestment as it shines a spotlight on the major actors of the fossil fuel

industry, sending a strong message about their legitimacy. Divestment

campaigns can stigmatise fossil fuel companies, causing major reputational

damage. Fossil fuel companies currently carry enormous lobbying power, and

divestment campaigns can serve to undercut this influence.

D I V E S T T Y N E & W E A R P . 9


N O R T H T Y N E S I D E C O U N C I L

Question 1: 2030 deadline to be net zero/carbon neutral

Green: Andrew Macardle, Coordinator, North Tyneside Green Party

We believe that divestment should be escalated and that 2050 is too late. We

have consistently campaigned for action by 2030. The Council adopted the

2030 Net-Zero target in September 2021, having committed to doing so in the

May elections under electoral pressure from NT Green Party and others. We

note that, as of yet, the Council has not formed a plan which will achieve it,

and this year's budget shows no signed of inroads. We don't have high

expectations that this plan, when it turns up, will address the divestment

issue. There is the risk that the Council may claim to “address” the issue

through creative carbon accounting or excluding pension investments from

the Council's carbon account. We will challenge any plan which doesn't make

the necessary provisions; this will be a lot easier with a strong presence on the

Council.

Labour: Councillor Sandra Graham, Cabinet Member for Environment

See response to Question 3.

Liberal Democrats: John Appleby, Chair, North Tyneside Liberal Democrats

Note: In the past four years, we have had only one or two councillors, and

since 2021 none at all. Therefore, some of your questions can’t be answered as

posed, as our party has not had sufficient influence in NT council to take

specific actions. The answers below are therefore tentative proposals for

action we’d like to see and would aim to influence if elected this year.

There should be no new fossil fuel development, and existing production

scaled back as quickly as possible. Pension scheme investment should be

ended unless such companies have credible and evidenced plans to work

towards net-zero and are engaging with the Transition Pathway Initiative that

coordinates major investors in this aim.

D I V E S T T Y N E & W E A R P . 1 0


N O R T H T Y N E S I D E C O U N C I L

Question 2: investment in fossil fuels

Green: Andrew Macardle, Coordinator, North Tyneside Green Party

We have actively campaigned for divestment as part of the net zero policy.

The Green Party led calls nationally to recognise a climate emergency and

locally we petitioned the Council in April 2019 to act. The detail of our petition

- including the call for divestment - can be found here We asked the Council

to commit to net zero by 2030 and we have repeatedly challenged the

Council on the decision to commit only to 2050. Further detail can be found

here

Labour: Councillor Sandra Graham, Cabinet Member for Environment

Fund Managers presented to the NTC Finance Team in Q4 21 about how the

overall fund was being re-positioned away from fossil fuel investments (and

other industries/ supply chains which are recognised as being C02 heavy – the

re-positioning takes the form of direct action (so the realising of investments

at an appropriate time) and also monitoring certain sectors with

internationally recognised ‘pathways to zero emissions’.

It is by both these methods that the scheme will ultimately reach carbon

neutral, although the timescales are aimed at 2050 rather than 2030 (in line

with some industry pathways such as airlines etc and the Government’s

target).

Liberal Democrats: John Appleby, Chair, North Tyneside Liberal Democrats

See above – we have been unable to take specific actions during this period.

Question 3: future reductions in investment in fossil fuels

Green: Andrew Macardle, Coordinator, North Tyneside Green Party

As a Party, we believe that the pension scheme should divest from fossil fuels

as quickly as possible. We recognise that there are a number of challenges

cont.over

D I V E S T T Y N E & W E A R P . 1 1


N O R T H T Y N E S I D E C O U N C I L

faced by pension schemes - not least the financial security required to ensure

pension benefits are protected. This can impair the ability to divest from fossil

fuels quickly. This is a hugely complex area and pension professionals are

working hard to balance the need to protect the future of scheme members

and the future of the planet. However, there has been progress in recent years

and a number of pension funds have taken active measures to reduce their

environmental impact, including divestment. In addition, Non-Statutory

(PCRIG) and Statutory (2021) Guidance has been produced to help pension

schemes with transition. The Statutory Guidance provides for Climate Change

Governance and Reporting. The Guidance also highlights that the risks

brought by climate change should be considered as financial risks to pension

futures. We believe that, with appropriate advice from pension professionals,

the North Tyneside pension fund can achieve divestment within the next four

years and protect member benefits.

Labour: Councillor Sandra Graham, Cabinet Member for Environment

Some work has already taken place – the fund already has a Carbon Footprint

Net Zero Strategy which reflects the principles of the Institutional Investors

Group on Climate Change (a globally recognised body). The fossil fuel

investment concentration was 12% against last measure and with a target to

reduce this to 6% by 2030. The fund is also committed to growing green

revenues from 4% to 15% in the same period and last year invested £650M in a

green ‘Future Worlds Fund’. New green investment products such as this will

become the norm in future years.

One of the key things for anyone proposing the speedy divesting of all such as

this will become the norm in future years.

One of the key things for anyone proposing the speedy divesting of all such

investments is that in many instances this would significantly affect portfolio

returns – leading to future deficits (which NTC would have to make good with

direct contributions from our general fund budget and which could impact

cont.over

D I V E S T T Y N E & W E A R P . 1 2


N O R T H T Y N E S I D E C O U N C I L

on future local authority service delivery).

We must balance moving as quickly as possible to a more ethical future with

the financial risks of doing so and as the appointed Trustees to do their best

by the Fund at any period in time. A tricky dichotomy. I do not think the

investments count towards NTC’s own carbon footprint or net zero targets as

these belong to the collective Tyne & Wear Pension Fund rather than the

individual Authority.

Liberal Democrats: John Appleby, Chair, North Tyneside Liberal Democrats

See our answer to qu.1 for our general approach. If elected, our councillors

would press for rapidly reducing investment unless such companies were fully

committed to net zero.

Question 4: specific fossil fuel investments by the council’s

pension schemes

Green: Andrew Macardle, Coordinator, North Tyneside Green Party

Without appropriate financial and actuarial advice, we are not comfortable on

addressing the specific investments listed. However, we believe that, with

appropriate advice from pension professionals, the North Tyneside pension

fund can achieve divestment within the next four years and protect member

benefits. We would expect divestment from businesses which profit from

fossil fuels, businesses which will not take appropriate action to become

Carbon Neutral and those businesses which engage in Greenwashing.

Labour: Councillor Sandra Graham, Cabinet Member for Environment

See response to Question 3.

Liberal Democrats: John Appleby, Chair, North Tyneside Liberal Democrats

Of the companies listed, some have credible plans as assessed by the

Transition Pathway Initiative (which continues to monitor the implementation

cont.over

D I V E S T T Y N E & W E A R P . 1 3


N O R T H T Y N E S I D E C O U N C I L

of those plans). In particular, Shell and BP have plans with some credibility,

especially as Shell is also bound by Netherlands law that compels climate

action. In contrast, Exxon Mobil has been very slow to make any commitment

at all, and we believe disinvestment from them should be top priority.

D I V E S T T Y N E & W E A R P . 1 4


S O U T H T Y N E S I D E C O U N C I L

Question 1: 2030 deadline to be net zero/carbon neutral

Green: Andrew Guy, South Tyneside Green Party

The council’s current target is a cherry-picked collection of operational

emissions. The pensions are classed as ‘indirect emissions’ and therefore are

not included in the council’s current scope of counting CO2. South Tyneside

Green Party will not accept a net-zero claim by South Tyneside Council if (but

not limited to) the pension fund does not divest away from fossil fuel

companies.

South Tyneside Green Party is very proud of its achievements of ensuring that

climate change is a top priority in our borough. The most significant event

was the council’s declaration of a Climate Emergency in July 2019, brought to

full council by Green Councillor, David Francis. In its original form, the

emissions from investing in the fossil fuel industry via the pension fund would

have bene included in the 2030 net-zero target. Unfortunately, the motion

was amended to only include ‘operational emissions’, this meant that the

pension fund’s emissions would not be targeted as these are classed as

‘indirect’ or ‘third-party’ emissions.

Question 2: investment in fossil fuels

Green: Andrew Guy, South Tyneside Green Party

South Tyneside Green Party is actively challenging the investment of fossil

fuels in the Tyne & Wear Pension Fund at a committee and full council level.

Green Party of England & Wales also takes the same position. The Green Party

believes that publicly funded bodies should invest for the public good, and

that means divesting from fossil fuels and investing in sustainable industries.

Universities and local authorities are funded by us, and we have the power to

influence their decisions. Divestment makes not only financial sense, but also

climate sense.

cont.over

D I V E S T T Y N E & W E A R P . 1 5


S O U T H T Y N E S I D E C O U N C I L

Green Party Policy CC150[DH(1] : To encourage long-term ecological thinking

in the finance sector, the UK should:

Require full disclosure of the climate-related risks on all investments

Require all managers of pension and investment funds based in the UK to

divest themselves of holdings in fossil fuel companies, most urgently from

coal.

Question 3: future reductions in investment in fossil fuels

Green: Andrew Guy, South Tyneside Green Party

South Tyneside Green Party intends to lodge a motion to full council which

would call for the council to divest its pension fund from fossil fuels. South

Tyneside Green Party would be satisfied by the following targets:

Immediately halt new investment in all companies that predominantly

earn their income from the exploration, extraction, storage and

transportation, processing and sale of all fossil fuels

Within two years, divest from companies involved in coal mining

By 2025, divest from direct ownership of all other fossil fuel companies

By 2030, divest from any commingled funds that include any fossil fuel

public equities and corporate bonds

Question 4: specific fossil fuel investments by the council’s

pension schemes

Green: Andrew Guy, South Tyneside Green Party

(Please see graphic overleaf for South Tyneside Green Party's response to question 4)

D I V E S T T Y N E & W E A R P . 1 6


S O U T H T Y N E S I D E C O U N C I L

Below is a list of fossil fuel investments currently in place for the council’s pension scheme. Please indicate

which, over the next four years, your party expect to see in place, which your party would like to consider

removing and whether your party has an alternative view of how best to approach specific investments.

* Engie is making significant headway with moving its operations away from

fossil fuels and investing in renewables. Engie’s newest strategic plan sets its

ambitions on becoming a world leader in the zero-carbon transition. It has set

out its definitive exit from coal. And we have seen proof in the real world that

it’s delivering on its promises to not only transition itself away from fossil

fuels, but also support other companies to do the same. We would therefore

monitor their operations and maintain investment if this trend continues.

D I V E S T T Y N E & W E A R P . 1 7


S U N D E R L A N D C O U N C I L

Question 1: 2030 deadline to be net zero/carbon neutral

Conservative: James Doyle, Deputy Leader

The Conservative Group does not believe the Council can reasonably claim to

have met its 2030 target without divesting completely from fossil fuels

(including those investments held indirectly through the Tyne and Wear

Pension Fund).

PLEASE NOTE: The Labour cabinet portfolio holder arranged for response

from council officer Jon Ritchie, Executive Director of Corporate Services,

Sunderland Council

Sunderland Council does not have its own individual pension fund, instead

the council and its employees participate within the Tyne and Wear Pension

Fund. The Council has a single representative (18 representatives in total) on

the Tyne and Wear Pension Fund Committee. Over the past year the

Committee has held several training sessions and received a range of reports

which led to approval of the Fund’s first Climate Change Policy and the

setting of the 2050 Net Zero target. Information on the Fund’s approach to

climate change including the new policy can be found on the website

The current Climate Change Policy does not state that the Fund will continue

to invest in fossil fuels until 2050 but that it will be Net Zero in terms of

carbon emissions by this date or sooner. These two statements are completely

different. The Fund has also set ambitious interim targets which will see

carbon emission reduced by 50% - 60% by 2030.

Most Tyne and Wear Councils have set their own 2030 operational targets,

including Sunderland Council, and the Tyne and Wear Pension Fund has set a

2030 carbon neutral target for its administrative operations. The distinction

isthat a Council and/or the administrative operations of the Pension Fund are

much better placed to decarbonise their operations by 2030. However, as a

global investor the Pension Fund would not be able to meet a 2030 net zero

cont.over

D I V E S T T Y N E & W E A R P . 1 8


S U N D E R L A N D C O U N C I L

target for its investment portfolio unless most of economies of the world

could achieve this date. The 2050 Net Zero ambition is consistent with the

ambitions of the UK and most other major global Governments targets and

we see this as a positive move when many other Pension Funds have yet to

make any declarations on this issue.

Green: Rachel Featherstone

If Sunderland Council continues to invest its pension in fossil fuels beyond

2030 then we will not consider it carbon neutral – it will have failed to meet

its targets. So far, divestment does not seem to be on the agenda for

Sunderland Council. It is not mentioned in their low carbon action plan at all.

Question 2: investment in fossil fuels

Conservative: Councillor James Doyle, Deputy Leader, Conservative Group

The extent of the Conservative Group’s control over Tyne and Wear Pension

Fund investments is limited. This is because the Group is in opposition and

therefore unable to exercise executive control in the same way as the Majority

Group. However, the Conservative Group is committed to pursuing full

divestment if it is in a position of control after the Local Elections on 5th May.

Jon Ritchie, Executive Director of Corporate Services, Sunderland Council

We are aware that responding to climate change is a key priority for the

Pension Fund and will be a significant factor in the ongoing review of the

Investment Strategy. However, there is no evidence that a policy of fossil fuel

divestment would support the Fund’s global decarbonisation ambitions.

A blanket approach to divestment is a simplistic response to very complex

issue and the Fund is focused on decarbonising the global economy rather

than just reducing its own exposure to fossil fuel companies. The Funds

Investment Managers engage with the companies they hold on the Fund’s

cont.over

D I V E S T T Y N E & W E A R P . 1 9


S U N D E R L A N D C O U N C I L

behalf, including raising climate issues. Each company’s approach

andresponses will be a factor in the investment decision taken. The response

to climate change is becoming an increasing part of the investment criteria

and hence over time where a company is not preparing an adequate climate

transition plan this will reduce the investment attractiveness of that

company. This may lead to decisions to divest from individual companies (not

just fossil fuel companies) on concerns over their approach to climate change

and this is encouraged by the Fund. For example, in 2021 Legal and General

removed ExxonMobil from the Future World funds and also supported an

activist engagement group at the company’s AGM which succeeded in

replacing three Directors on the Board with others who would make a positive

contribution towards climate change.

Actions that the Pension Committee have undertaken on behalf of the Fund

include:

Setting a 2050 Net Zero target and interim targets

Agreeing a new Climate Change Policy

Investing 15% of the long term allocation of quoted equities (6% of the

total fund) to the Legal and General Future World series of funds which

exclude coal mining companies and reduce the exposure to companies

with carbon reserves by 50%

Committing 3% of the Fund to the Border to Coast Climate Opportunities

fund

Commitment to publish a Task Force for Climate Related Financial

Disclosures (TCFD) Report for 2021/22

Long standing member of the Local Authority Pension Fund Forum.

Green: Rachel Featherstone

We are not currently represented on Sunderland Council. If Green councillors

are elected this year, or in the future, we will bring a motion to council

cont.over

D I V E S T T Y N E & W E A R P . 2 0


S U N D E R L A N D C O U N C I L

requiring it divest its pension from fossil fuel companies and recommending

that the funds are invested in renewable energy – particularly community

energy schemes - instead. Investments in renewable energy are now

consistently outperforming investments in fossil fuels so this makes financial

sense as well as contributing to a carbon neutral future for Sunderland

Council.

Question 3: future reductions in investment in fossil fuels

Conservative: Councillor James Doyle, Deputy Leader, Conservative Group

A reduction of £230mil is the aspirational target of the Conservative Group. As

Sunderland City Council is only one partner to the Tyne and Wear Pension

Fund, such a reduction would require consensus among the other partner

authorities. In order to secure best value for pension fund holders, the timing

of divestment should be considered carefully so as to minimise (and ideally

eliminate) the downside effects of volatility in the equities market.

Jon Ritchie, Executive Director of Corporate Services, Sunderland Council

As stated above the Pension Fund is considering the challenges of climate

change as a key factor in the ongoing review of its Investment Strategy to

support the achievement of the Net Zero targets. Through its representation

on the Committee, the Council is actively challenging and supporting these

activities to ensure that the targets are achieved.

We are aware the Fund is currently working on its reporting around carbon

metrics and is developing a roadmap which will be published in November

2022 setting out how it will deliver its Climate Change Policy targets. It will

also publish its first TCFD Report[DH(1] and is working closely with its pooling

partner, Border to Coast, and its other Investment Managers to develop

suitable reporting and metrics. Each year the Fund will publish a report on its

progress which will be available on the website.

cont.over

D I V E S T T Y N E & W E A R P . 2 1


S U N D E R L A N D C O U N C I L

Green: Rachel Featherstone

This will depend on our representation on the council and the balance of

power on the council overall. If we do not have Green councillors, the action

we can take will be restricted to lobbying and asking questions at council

meetings.

If we have Green councillors, we will seek support for a motion calling on the

council to cease new investments in fossil fuel companies immediately and

fully divest from its existing fossil fuel investments by 2030. Our priority would

be to divest from companies involved in coal production within two years.

The likelihood of success depends on the composition of the council. Labour

controlled councils elsewhere, for instance in Ashington, have blocked

divestment motions. If the council is in no overall control, our

Greencouncillors would have more bargaining power and may be able to

build a majority in favour of full divestment by 2030.

Question 4: specific fossil fuel investments by the council’s

pension schemes

Conservative: Councillor James Doyle, Deputy Leader, Conservative Group

The response indicated that removal of all investments on the list would be

considered.

Jon Ritchie, Executive Director of Corporate Services, Sunderland Council

Each of the Pension Fund’s Investment Managers are appointed with specific

requirements in terms of their investment approach. Whilst each Manager

makes the investment decision of which assets to hold this must be within

the scope of these requirements. The Fund requires all its Investment

Managers to recognise its Corporate Governance and Responsible Investment

Policy along with the new Climate Change Policy.

With regard to question 4 the Fund is not in a position to be able to give

cont.over

D I V E S T T Y N E & W E A R P . 2 2


S U N D E R L A N D C O U N C I L

specific responses for the companies listed. In the active portfolios the Fund’s

Investment Managers make the investment decisions within the parameters

of the mandate given to them by the Fund and select each stock based upon

a range of criteria including climate related issues. For the passive portfolios

the Investment Manager replicates the stocks held in a specific benchmark

i.e., FTSE100 and so these stocks will be held as long as they form part of the

benchmark.

However, as explained in the Fund’s position statement all Investment

Managers engage with the companies they hold including raising climate

issues. Each company’s approach and responses will be a factor in the

investment criteria. The response to climate change is becoming an

increasing part of the investment criteria and hence over time where a

company is not preparing an adequate climate transition plan this will reduce

the investment attractiveness of that company. As described in the

ExxonMobil example above.

Ultimately the Fund is looking to support global decarbonisation by 2050

which involves all economies and companies. The immediate divestment

from fossil fuels is not consistent with the Fund’s fiduciary responsibility and

we believe is an overly simplistic approach to the complex issue of global

decarbonisation.

Green: Rachel Featherstone

(Please see graphic overleaf for Rachel Featherstone's response to question 4)

D I V E S T T Y N E & W E A R P . 2 3


S U N D E R L A N D C O U N C I L

Below is a list of fossil fuel investments currently in place for the council’s pension scheme. Please indicate

which, over the next four years, your party expect to see in place, which your party would like to consider

removing and whether your party has an alternative view of how best to approach specific investments.

D I V E S T T Y N E & W E A R P . 2 4


ADDITIONAL LINKS

Gateshead:

https://www.gateshead.gov.uk/article/14125/Climate-change-in-Gateshead

https://policy.greenparty.org.uk/wr.html

https://eur02.safelinks.protection.outlook.com/?

url=https%3A%2F%2Fwww.gateshead.gov.uk%2Farticle%2F14125%2FClimate-change-in-

Gateshead&data=05%7C01%7Ccllr.jmcelroy%40gateshead.gov.uk%7C7f5be1e9bdc84ba3a8

b508da246105a2%7C09fbb97943174d219cb6e58811169cd8%7C0%7C0%7C63786229791100

4267%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik

1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=ZBKS9yKZSAGwq0ND6wQdZpMp

WbT8HFlVB6WgTtBG9ts%3D&reserved=0

https://eur02.safelinks.protection.outlook.com/?

url=https%3A%2F%2Fwww.gateshead.gov.uk%2Fmedia%2F24041%2FClimate-change-

stakeholder-update-January-

2021%2Fpdf%2FStakeholder_update_Jan_21.pdf%3Fm%3D637466547802130000&data=05

%7C01%7Ccllr.jmcelroy%40gateshead.gov.uk%7C7f5be1e9bdc84ba3a8b508da246105a2%7

C09fbb97943174d219cb6e58811169cd8%7C0%7C0%7C637862297911004267%7CUnknown%

7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn

0%3D%7C3000%7C%7C%7C&sdata=%2FCKlpJaJXsE%2BZhTKTA8NKMWsrmK2CAkjHXwkk

J6km8o%3D&reserved=0

Newcastle:

https://www.newcastle.gov.uk/our-city/climate-change-newcastle

North Tyneside:

https://my.northtyneside.gov.uk/category/539/sustainability

https://northtyneside.greenparty.org.uk/climate-emergency-petition/

https://northtyneside.greenparty.org.uk/climate-emergency/

South Tyneside:

https://www.southtyneside.gov.uk/article/36274/Climate-change

Sunderland:

https://www.twpf.info/article/74294/Climate-Change

https://www.sunderland.gov.uk/media/22960/Sunderland-Low-Carbon-Action-

Plan/pdf/Sunderland_Low_Carbon_Action_Plan.pdf?m=637461314396730000


NEXT

STEPS

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LAUNCH A RANGE OF NEW ACTIVITIES,

LEADING UP TO COP27.

PLEASE GET IN TOUCH WITH DIVEST TYNE &

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THIS DOCUMENT IS THE PROPERTY OF DIVEST TYNE & WEAR

ALL EXTERNAL LINKS CORRECT: APRIL 2022

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