Investing in Net-Zero: fear or lack of awareness?
The domino effect from the Paris Agreement’s net-zero target has triggered real-world climate actions. Net-zero targets now cover two-thirds of the global economy, which means global GDP is generated in economies that now have net-zero goals in place.
Net-zero targets are a legal and institutional duty, and as the UK has demonstrated, it informs policy decisions on pain of legal challenge, and it provides a legislative foundation for the net-zero mandates like the Green Mandate awarded to the Bank of England last March, and strongly supported as a “critically important move” by Mark Carney, Former Bank of England Governor, now UN Special Envoy on Climate Action and Finance.
In a recent interview published by the UN Web TV, Mr Carney spoke about how private finance is increasingly aligned behind achieving net-zero GHG emissions. He underlined that people everywhere should keep up the pressure in calling for climate action.
“If you are making investments, new technologies, a new way of doing your business, all in service of reducing and eliminating that threat, you are creating value. Companies and those who invest in them and lend to them, and who are part of the solution will be rewarded. Those who are lagging behind and are still part of the problem will be punished”.
Divestment
One of the biggest votes in the UK comes from local authorities that with their pension funds continue to invest around £10 billion in fossil fuels, despite more than 75% of councils have declared a climate emergency (UK Divest Report, 2021)
As the UK government prepares to host this year’s COP26 climate talks, a report from UK Divest (February 2021) reveals that local authorities are still backing the industry responsible for the climate crisis. Northern Ireland local authory pension funds are currently investing £113 million in fossil fuels, with £33 million invested in direct shareholdings of coal, oil and gas according to NILGOSC (BelfastLive, 2021). Northern Ireland has the highest percentage of pension funds' invested in the fossil fuel industry (3.4%) relative to the rest of the UK (Wales 3.2%; England 3.1%; Scotland 2.5%).
Inspired by a local divestment campaign, Councillors at Ards and North Down Borough Council brought forward a motion on divestment in 2019, and yet despite being one of the first Councils to declare climate emergency a Committee at the Council recently voted against requesting the fund manager to divest the remainder of its pension fund (BelfastLive, 2021).
As we recover from the pandemic, we can choose to stick to old systems of investment that keep accelerating the climate crisis, or we can invest local money in ways that matter for local people and their future.
It costs nothing to make this change, and six councils in the UK have already committed to divest fully. It’s time to ask why your council has not.
Sustainable Northern Ireland has backed the Make My Money Matter campaign calling on local councils to divest their pension funds from fossil fuels. The All Party Group on Climate Action meeting on 24 September has a focus on Divestment to raise awareness and understanding on the matter. More details can be found here.
