'Banking on failure': Glasgow council under fire over fossil fuel pension investments ahead of COP26

Glasgow City Council has come under fire from environmentalists who are accusing the local authority of “banking on the failure” of international climate talks due to be held in the city, over its continued pension fund investments in fossil fuels.

The Strathclyde Pension Fund (SPF), which is run by Glasgow City Council, was asked to carry out an assessment of energy sector companies in its portfolios before the United Nations COP26 climate summit, taking place in November.

The report suggests fund managers would use a traffic light system where a ‘red’ grading, for firms that “cannot or will not adapt”, would see investment pulled.

The council’s own analysis suggests £316 million of SPF cash is invested in oil and gas firms.

Climate campaigners from Strathclyde Divest and other groups protest outside the headquarters of Glasgow City Council, condemning the authority's pension fund investment in fossil fuel polluters. Picture: Colin Hattersley

However, estimates by campaign group Friends of the Earth Scotland suggest the total could be more than double that figure, at £836m.

Either way, the SPF – the largest of its kind in Scotland – has the biggest investment in climate polluters of any public fund in the country.

The SPF has reduced the percentage of its investments held in fossil fuel companies in the past few years and recently announced it would introduce divestment as a potential tool where firms did not address the climate emergency.

The council’s pensions committee is due to meet for the last time before COP26 on Wednesday, when the report on fossil fuel investments will be discussed.

Campaigners have branded continued financing of fossil fuels “financial folly and morally repugnant” while the world grapples with the task of curbing climate change.

Demonstrators staged a protest outside council offices in Glasgow to express anger at what they say amounts to “greenwashing”.

Ric Lander, divestment campaigner at Friends of the Earth Scotland, said: “Fund members, community activists and the city council have demanded the Strathclyde Pension Fund come up with a plan to divest from disastrous fossil fuel companies.

“Now it seems they’ve instead come up with a plan to carry on with business as usual.

“Continuing to invest hundreds of millions in climate polluters is financial folly and morally repugnant.”

He added: “Unless this policy is radically altered, Glasgow will host the world’s climate crisis talks knowing it’s pension fund is banking on their failure.

“City councillors do have the power to change course and invest sustainably.”

Isla Scott, from campaign group Divest Strathclyde, said: “We want to see SPF put in place a real policy that will ensure they divest from these climate-destroying companies and reinvest in a sustainable future.”

A spokesman for Strathclyde Pension Fund said: “It’s welcome that campaigners recognise that our direct investments in industries like oil and gas are already decreasing.

“They are also dwarfed by our investments in clean, renewable energy.

“The fund’s exposure to oil and gas is less than half of what it was just five years ago, in terms of a percentage of our passive equity – and closing in on a two-thirds reduction in terms of the overall value of the fund.

“Strathclyde Pension Fund is one of the first large pension funds to approve divestment as a tool to address firms that do not engage with the climate crisis.”

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