SCOTLAND'S biggest local government pension fund is facing renewed calls to dump oil and gas investments.

The giant Strathclyde fund has been urged to drop all fossil fuel extraction assets from its multi-billion-pound portfolio from a working group set up by its biggest contributor, Glasgow council.

The city has ambitious plans to become the first in the UK to get to zero-net carbon, when it takes out as much of the greenhouse gas from the atmosphere as it puts in. 

A working group set up to help the city achieve its aims has called for divestment. 

In a major report, it said: “Another major issue in relation to finance is that of pension fund investments in fossil fuel extraction. 

“The working group heard proposals for a programme of divestment from such activities and learned of a growing body of experience from organisations which have done this. 

“They include major funds within our own city, such as the pension fund for the University of Glasgow. 

“We have done this kind of thing before in moving away from investments in the tobacco industry and arms manufacturers, so we can do it again and we should do it for hydrocarbons. We commend the recent call from West Dunbartonshire Council for such action and recommend that Glasgow City Council works with the other employers and members to make a wholesale shift away from investment in hydrocarbons. 

“We recognise that there is an increasing risk of stranded assets which could undermine the performance of Strathclyde Pension Fund in years ahead.”

The fund is independent. Its spokesman said: “Strathclyde Pension Fund is a strong supporter of the transition to a low carbon economy and has put climate change at the heart of its responsible investment strategy.

 “Any pension fund should welcome engaged and committed members and we agree on the threat posed by climate change now and in the future. The fund has been a leader in terms of measuring its own carbon exposure – which is below average. 

“It is also progressively de-carbonising by shifting investment to renewable energy and by working together with other investors to demand better standards from industry.”

He added: Strathclyde Pension Fund is recognised as one of the world’s most active investors in addressing climate change."

The independent Asset Owners Disclosure Project (AODP) ranks the fund among the top asset owners globally for the disclosure and management of climate risk.

It looks at three key areas: engagement, to gauge how investors are influencing the transition to a Low-Carbon economy; risk, to assess how well owners are measuring the climate change risk within their portfolios, and investment in low-carbon assets.

“In 2017, the fund was in the top five performing asset owners in the UK – and the best performing Local Government scheme.”

An English council, Waltham Forest Council, was the first to announce divestment. However, it still has millions of pounds in shares of big oil firms.
Norway’s $1 trillion-pound national fund is divesting from oil and gas - source of much of its initial capital.

Earlier this year there were  suggestions public-sector pension funds should throw some of their financial  weight behind reforesting.