This meeting of the Pension Fund Committee will be held virtually in
order to conform with current guidelines regarding social distancing. Normally
requests to speak at this public meeting are required by 9 am on the day
preceding the published date of the meeting. However, during the current
situation and to facilitate these new arrangements, we are asking that requests
to speak are submitted by no later than 9am four working days before the
meeting i.e. 9 am on 30 November 2020. Requests to speak should be sent to
Deborah.miller@oxfordshire.gov.uk together with a written statement of your
presentation to ensure that if the technology fails then your views can still
be taken into account. A written copy of your statement can be provided no
later than 9 am 2 working days before the meeting.
Where a meeting is held virtually and the addressee is unable to
participate virtually their written submission will be accepted
.
Written submissions should be no longer than 1 A4 sheet.
Minutes:
The Committee received public
addresses from Mr Michiel Stofferis
from Fossil Free Oxfordshire.
Mr Stofferis
informed the Committee that he was a Dutch earth scientist and before joining
Fossil Free Oxfordshire in 2018, he had worked for 35 years in the oil &
gas industry, developing fields and certifying reserves.
Members were informed that Fossil
Free Oxfordshire were happy that the Pension Fund was reducing emissions of
their investments at a pace of 7.6% every year, yielding a 50% reduction in
emissions by 2030. However, Members
were reminded that this was at odds with the OCC net-zero emission target by
that date, which would require a more drastic reduction target.
Mr Stofferis
commented that Fossil Free Oxfordshire did not understand why the fund
continued to invest in fossil fuel companies. These continued investments
allowed fossil fuel companies to press on with exploration and development of
new fields. These extra fossil fuels found their way to a market of consumers,
whom, on the other hand, OCC required to reduce CO2 emissions in line with the
decarbonising of the fund. So, by these continued investments OCC were creating
their own stranded assets and delaying the urgent energy transition.
Currently neither the Oxfordshire
Pension Fund nor Brunel had targets for an annual reduction of fossil fuel
reserves and yet scientific evidence of superfluous fossil fuel reserves was
available in many publications. The reputed independent think-tank Carbon
Tracker reported last year that there was more than 50 years’ worth of proved
oil and gas reserves as of end 2018.
Mr Stofferis
said that as an oil and gas reserves certifier, he completely concurred with
this estimate. The carbon budget that would keep us below 1.5°C global warming
allowed us to burn only 13 years’ worth of reserves as of end 2018. In a Paris
aligned world, 75% of current reserves would be stranded and the development of
new fields would be a waste of investors’ money.
There were existing tools to
reduce exposure to fossil fuel reserves: instead of using antiquated
benchmarks, such as FTSE, benchmarks fit for the challenges of the 21st century
were needed. Climate Transition Benchmarks (CTBs) and Paris Aligned Benchmarks
(PABs) already existed. Not only did these benchmarks insist on a 7% annual
reduction in emissions, but they also insisted on big reductions in fossil fuel
reserves (PABs require more than 50% over 10 years). For example, TPI in
cooperation with the Church of England have developed the FTSE TPI Climate
Transition Benchmark. Since the beginning of the year this benchmark was being
used by the Church of England for a £600 million fund, reducing the exposure to
Fossil Fuel Reserves by 69%.
If Oxfordshire Pension Fund was
to be aligned with the Paris Agreement, the same approach was required. And
this could only be done, if Brunel started using more modern Climate Transition
benchmarks or even better Paris-Aligned benchmarks, so that exposure to fossil
fuel industries was reduced.
In conclusion, OCC were urged to require that Brunel adopted these benchmarks for all your portfolios to enable you to implement your climate policy.