CARMARTHENSHIRE COUNTY COUNCIL voted to back a motion calling on the Dyfed Pension Fund to divest itself of fossil fuel funds.
Councillors voted on Wednesday to divest from fossil fuel companies within two years.
The motion called on the £2.5bn Dyfed Pension Fund to divest from fossil fuel companies, the most ambitious plan for a Welsh local authority.
Before the debate, a large number of councillors had to exit an already underpopulated chamber, due to their personal and familial interests in the Fund as beneficiaries.
A similar motion calling on Cardiff & Vale Pension Fund to divest from fossil fuels within five years was passed by Cardiff Council in July.
The motion coincides with environmental protests in central London where thousands of activists are seeking to pressure the UK Government to tackle Climate Change.
During the meeting, Carmarthenshire Energy Chair, Greg Parker, outlined an alternative to funding fossil fuels through a question to the Chair of the Dyfed Pension Fund Committee, noting that investing in solar and battery capacity could result in energy independence within twelve years, with a significant return for policyholders.
Speaking in the debate, Labour Leader, Cllr Rob James stated “You can’t declare a climate emergency and carry on investing in the very companies that are responsible for the climate crisis.
“It is important to note that the Pension Fund policyholders will not suffer as a result of this bold agenda. We believe they will be financially better off.
Lancashire County Council has invested £12 million in the UK’s largest community-owned solar farm, with a projected 11% annual return.
“Carmarthenshire Council have just a few levers to pull to support the effort in tackling climate change. This is the biggest and most important one. We must put our money where our mouth is.
“We must take radical action before we face the full, and devastating force of a climate catastrophe.”
The motion will now go before Dyfed Pension Fund Committee for consideration.
However, the path to the agreement was difficult and there was strong dissent from attempts to politicise an issue upon which there had previously been cross-party harmony.
Members’ moods on the Plaid and Independent benches were not improved by a social media message from Labour leader Rob James, who suggested that Plaid Cymru was seeking to thwart his blockbusting climate change agenda.
His motion called for the Dyfed Pension Fund to divest itself of all investments in fossil fuel funds within two years.
An amendment proposed by Cllr Carys Jones called on the Fund to divest itself as soon as possible.
On such wording, arguments turn.
Introducing the motion, Cllr James reminded councillors that they declared a climate emergency earlier this year. He felt progress had been slow and recounted how, over the summer, he had been influenced by Extinction Rebellion protestors and their demand for action on climate change. Having spoken to the protestors, Rob James said that his motion was a call for action now.
The Labour leader explained his vision for the pension fund to invest widely in renewable energy-based locally. He said the opportunities for that investment were present and in Carmarthenshire now and that it was an opportunity to get out in front and invest in the energy of the future and not in the past.
Seconding the motion, Cllr Deryk Cundy, said this was a case where ‘Mammon could help Gaia’. He noted that investment in renewables outside Wales already formed a small part of the pension fund’s investment portfolio. He wanted to bring those funds back to invest in renewable energy industries based in Wales.
Cllr Carys Jones moved her amendment to the motion. Cllr Jones said she supported Cllr James’ motion’s aims but questioned whether such a substantial divestment was possible in the timeframe set out in it.
She said that Plan B, the investments in renewables, had to be ready to roll before Plan A, the investments in fossil fuels were dropped. Carys Jones said that she did not know whether enough viable local opportunities existed for investment in renewable energy. She also explained that the fund held a financial responsibility to those who were scheme members to maximise the return for their pension investments.
Aled Vaughan Owen spoke strongly in favour of the motion. The Plaid councillor, who proposed the climate emergency motion in February, explained that the pension fund also had the chance to divest itself of investments on ethical grounds. He highlighted the interlocking legislation which enables the pension fund to move rapidly to get rid of investments in fossil fuel investments.
Cllr Owen explained that he looked at the investment record of the Dyfed Pension Scheme. From 2009 to 2017, the amount the fund held in fossil fuel-related funds had risen inexorably; the fund no longer published the figures underpinning those investments, it only recorded them as a percentage of the whole fund. He set out that one fund in which Dyfed Pension Fund invested was the Blackrock fund relating to fossil fuels which had plummeted in value over the last few years. He said retaining that investment was bad for the fund, bad for its beneficiaries, and did nothing to tackle the climate emergency the Council unanimously declared.
Cllr Jeff Edmunds rejected the partisan political note introduced into the debate and said that this was too important an issue for political game playing. He questioned the possibility of meeting the two-year time limit set out in the motion. He supported the motion’s intent but queried the speed at which the action called for could be taken.
He said that there were no figures behind the motion and, while he supported its intent, he felt without some concrete financials behind it, it was difficult to support.
Cllr Giles Morgan picked up on the point raised by Cllr Edmunds. ‘Putting his audit head on’, he felt the lack of investment data and an indication of which local businesses would benefit from the divestment and whether they were ready for the size of investment suggested were issues that councillors needed to bear in mind.
As Cllr Cefin Campbell started to address the issue, the sound on the webcast faded out making contributions impossible to follow in either Welsh or English.
When the sound returned, as Cllr Gareth Thomas concluded his contribution to the debate, Cllr John Prosser said his experience as a member of the Pension Board was that divestments could be made quickly and that they had been previously.
Cllr Darren Price raised an interesting point for the debate. He noted that the Fund held investments on behalf of 50 separate member organisations. The Council could ask the Dyfed Pension Fund to divest its interests in fossil fuels, but regardless of its status as lead authority, the decision on divestment would ultimately be down to the Pension Fund’s Board. Who could, as he pointed out, say ‘no’.
Picking up on Cllr Price’s remarks, Cllr Carys Jones asked for clarification as to whether the motion was a request or an instruction. She noted that officers, who were absent from the Chamber because of their interests as potential beneficiaries of the fund, were unable to assist. In the absence of their guidance, Kevin Madge in the Chair said it was up to Councillors. Darren Price again pressed the point that the motion ‘called’ on the Pension Fund to act.
Carys Jones said, such being the case she would withdraw her amendment.
However, in an effort to pluck defeat from the jaws of certain victory, Cllr Rob James – who appeared to have prepared for debate of a different tone and with a different conclusion – said that the motion both instructed the fund and called upon it to divest itself of fossil fuels. He then made a mess of his position by saying that the two years in his motion was a target for the fund and open to review at the end of the period if divestment had not been achieved.
With the number of angels dancing on the head of a pin growing rapidly, Cllr Jones took the motion at its face and withdrew her amendment.
The motion passed with no opposing votes and five abstentions.
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