John McDonnell and Jeremy Corbyn support Divest Parliament, a group trying to force the parliamentary pension fund to drop fossil fuel investments © AFP
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Jeremy Corbyn and John McDonnell are joining a campaign for the £612m parliamentary pension fund to drop its investments in fossil fuels, underscoring how a Labour government would approach climate change.
The Labour leader and shadow chancellor have swung their support behind Divest Parliament, a group trying to force the Parliamentary Contributory Pension Fund to drop investments in fossil fuels, including a £5.6m stake in BP and £5m of shares in Royal Dutch Shell.
Mr Corbyn said the UK “must show leadership in confronting the existential threat posed by climate change”.
“One contribution we can make as MPs is to end the investment from our pension fund in fossil fuel industries, which is why I have signed the pledge,” he said. “To help protect our planet, we must wean our economy off its fossil fuel dependence and do more to move towards clean and renewable energy.”
The Labour party’s manifesto ahead of June’s general election included plans for a seismic shift in the way that Britain produces its energy, setting a target for 60 per cent of all energy generated in the UK to come from zero-carbon or renewable sources by 2030.
The current Conservative government is seeking to produce 15 per cent of all energy from renewables by 2020. It has also committed to reducing emissions by at least 80 per cent of 1990 levels by 2050.
The pension fund for Britain’s MPs has an array of divisive investments, including £6.6m in a Jersey offshore unit trust, £6m in three US tech groups all accused of tax avoidance — Amazon, Alphabet and Apple — and £5.6m in British American Tobacco.
Divest Parliament, which now has signatures from 100 MPs from all major political parties, is calling on the fund to “uphold its fiduciary duty and take the financial risks of climate change seriously” by limiting its exposure to fossil fuels.
The initiative has been pushed by Caroline Lucas, Green Party leader, who said it was unacceptable that MPs’ savings “continue to fuel climate chaos”.
Zac Goldsmith — one of two Conservative MPs to back the group — said shifting the pension fund’s investments would “send a powerful signal” about politicians’ intentions.
Divest Parliament is not calling for the fund to immediately sell its shares in fossil fuel companies. It wants the fund to not take on any new investments and divest the existing investments gradually over five years.
Trustees of the Westminster pension fund have previously said they should not exclude certain investments on “ethical grounds”, because it would involve the imposition of their views on to the fund’s active managers.
Global institutions representing over $5tn of funds have made divestment commitments in recent years, ranging from the Rockefeller Brothers Fund to Norway’s sovereign wealth fund. In Britain, institutions promising to divest from investing in fossil fuels include the British Medical Association and the Guardian Media Group.
In a speech last week at the United Nations’ Geneva headquarters, Mr Corbyn warned that the planet was “in jeopardy”, with the number of natural disasters having quadrupled since 1970.
UK prime minister Theresa May will be among 50 heads of state in Paris this week for an international summit on climate change, hosted by French president Emmanuel Macron to mark the two-year anniversary of the Paris Agreement on climate change.