Pension Funds: Financial and Ethical Investments Debate
Full Debate: Read Full DebateDepartment: Department for Work and Pensions
Tommy Sheppard
Main Page: Tommy Sheppard (Scottish National Party - Edinburgh East)Department Debates - View all Tommy Sheppard's debates with the Department for Work and Pensions
Pension Funds: Financial and Ethical Investments
Tommy Sheppard Excerpts(5 years, 7 months ago)
Westminster HallRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Sir Edward Davey
I saw what happened at the BP annual general meeting yesterday, and I welcome it, although a second motion, which was a bit stricter, did not carry. I would have liked that motion to carry.
That brings me to my argument. Not only is there a moral imperative for us to divest, given the threat climate change poses to our planet; there is also a financial risk for pension funds and their beneficiaries. We need to explore that. We need to make it clear to pension fund managers and trustees that pulling out of fossil fuels is the right thing to do in financial terms. The real issue is often called the carbon bubble. We are investing in more fossil fuels than we could possibly need if we were going to stay climate change compliant. At some stage, that bubble of investment in carbon that we do not need will burst, leaving pension funds and the wider economy in a serious mess. Those assets would be worthless; they would be stranded assets, which would cause huge disruption in our financial sector.
Tommy Sheppard (Edinburgh East) (SNP)
I agree completely with what the right hon. Gentleman is saying. I think he is coming to the heart of the matter. I, like many other people, have a private pension fund, and I instruct my broker to ensure that it is directed into ethical investments. Of course, the broker has always said, “You’re not going to get as much of a return as you might get if you invested in other things.” The time has come for that paradigm to be reversed. We have to explain to investors that, over the next 10 to 15 years, increasing governmental action against fossil fuels and dirty technology will make their returns worse. Now is the time to jump ship and to disinvest from dirty technology.