Minutes:
The Committee received the following public address:
Mr Pete Wallis addressed the Committee as both an LGPS scheme member and as a member of Fossil Free Oxfordshire (FFO), against the proposal in the draft policy which proposed engagement with non-Paris-compliant companies for the next three years. Although FFO felt that this was fine for most companies, they did nor feel this was acceptable for fossil fuel companies as the world needed to be decarbonised and this could only happen if the world stopped producing and using fossil fuels. Fossil fuel companies therefore needed to shrink and ultimately cease to exist. FFO urged the Committee the Committee to transfer a much larger asset allocation that the suggested 5% into Brunel’s passive low carbon fund, bearing in mind that Oxfordshire had committed to achieving a net-zero emission status by 2030.
He further urged the Committee to urge Brunel to make sure they had active low or zero carbon funds available and to include exclusion criteria into the Climate Change Policy, such as the Pension Fund of the Church of England which used TPI’s Carbon Performance to exclude the worst polluters. Lastly, he asked the Committee to note a recent survey of 1132 Unison Members showed that 92% agreed that climate change would have a measurable economic impact within their lifetime and 84% agreed that ethics were more important than returns in investment decisions. He felt that beneficiaries of the scheme should be consulted when considering investment principals and strategy.
Mr Bond speaking as an energy strategist, explained that there was currently an energy transition going on, driven by technology and policy. Solar, wind, batteries, electric vehicles were all on extremely rapid learning curves where costs were falling by 20% per year and their costs had fallen below those of fossil fuels. There were also increasing actions coming from policy makers, including Oxfordshire County Council to prevent the use of fossil fuels and ban cars from city centres, together with an emerging market energy leapfrogging going on, led by China and India, whereby the emerging markets were going straight to renewable energy to fossil fuels. The world was shifting from fossil fuels to renewable energy in the same way as two centuries ago it moved from biomass to fossil fuels and a century ago, we moved from horses to cars and twenty years ago from the newspapers to the internet.
The energy transition would lead to a significant reallocation of capital (this had been backed up by the world’s largest Fund Manager). Therefore, the fossil fuel sector was deeply at risk and was a huge super-tanker of a sector with massive fixed costs that now faced structurally declining demand and new competition for the first time in its history. It had been argued that this was a pendulum and that things would get better. However, at times of profound change, the efficient market theory breaks down. This could be argued if it was a cycle but is was a profound structural change. Since Mr Bond presented to the Committee in November, the share price of Shell was down by 28%, the share price of BP was down 18% and the index was down by just 8%. It would be deeply irresponsible to ignore these changes, time was running out. He urged the Committee to act.