Pension Funds: Financial and Ethical Investments

Debate between David Duguid and Patrick Grady

Wednesday 22nd May 2019 Westminster Hall

[Patrick Grady]

My hon. Friend is right, and I hope we will hear that point from the Minister.

Difficult decisions will have to be made. The Scottish Government have halted their plans to cut departure tax at airports, and the First Minister said in the Chamber that we will have to look again at our stance on the expansion of Heathrow. Those are the ways that we can begin to make that just transition, and that is the importance of the Divest Parliament pledge, which I and the vast majority of SNP Members have signed and are happy to endorse.

[David Duguid]

Will the hon. Gentleman give way?

[Patrick Grady]

I am conscious of the time, and as the Chair said, we must ensure there is time for the Minister and shadow Minister to respond.

We must lead by example, and starting with our own pension funds is one of the best ways to do that. Like the hon. Member for Bristol West (Thangam Debbonaire), and others, I hope that the trustees are listening to this debate.

It is right to place an emphasis on both the ethical and the financial risks. The ethical risks are there for us all to see. The impact of over-reliance on fossil fuels over the years most affects people in developing countries, whose consumption of fossil fuels has been the least, but who are feeling the impact of climate change first and hardest. As the hon. Member for Somerton and Frome (David Warburton) said, this is not just about financial prudence; there is also a financial logic to switching investments towards clean, green and diversified technologies. Even without a reduction in emissions for reasons of climate change, fossil fuels are a finite resource, and one day they will run out. We must make the transition.

While we still use fossil fuels, we must do so as cleanly as possible. That means investment in things like carbon capture and storage, on which the UK Government have again been woefully lacking. Governments have a responsibility to create a climate-friendly investment environment. The Scottish Government are doing their part with solid environmental and ethical considerations and procurement guidance, as well as the establishment of the Just Transition Commission, which will seize those transition opportunities while ensuring that communities are not left behind as they were during the deindustrialisation of the 1980s.

The UK Government must play their part, and we heard interesting proposals from the right hon. Member for Kingston and Surbiton about aligning decisions to the Paris agreement targets. I suggest that aligning decisions to the sustainable development goals would also make a lot of sense. In reserved areas, the Government should fully operationalise carbon capture technologies and accelerate action to decarbonise the gas grid. They should redesign vehicle and tax incentives to support industry, and commit to adhering to future EU emissions standards, irrespective of our future status within the EU. They should reduce VAT on energy efficiency and home improvements, and support the renewables industry more generally. All that would create a more incentivised investment environment for new, clean and green technologies.

We should listen to the future generations and climate change school protesters. If they wish to claim a pension in a sustainable environment in decades to come, that will require action now to tackle climate change and build a financially viable and sustainable pension fund. For them we must seize this opportunity and look not just at financial and ethical risks, but at the financial and ethical opportunities of a cleaner, greener and more just world.