British Gas - Energy is Our Business (!!!)
Rye House Gas Power Station is in the news this morning as the site of the #PowerBeyondBorders camp, where large numbers of human rights and environmentalist activist have set up an occupation.
Also in the news this morning is the announced resignation of Ian Conn the Chief Executive of Centrica, which owns British Gas. Mr Conn was also awarded a generous pay rise of 44%, taking his salary to £2.4m or 72 times an employee in the lower quartile of its salary range (1). Fat cat salaries have long caused consternation and in 1996 the GMB brought a live pig, Cedric, into the British gas AGM. Share prices in Centrica have fallen to 82p, the lowest in 20 years under his reign, and last year he announced 4000 job cuts. Interviewed on Radio 4, Conn cited the impact of the fuel price cap on Centrica as its biggest challenge, though also pointed to ‘other issues’ including warmer winters lowering demand. He did not talk about Centrica’s investment in fracking nor the rising call for divestment in the fossil industry especially by campaigners concerned about investment by public sector pension funds.
Many local authorities have combined assets into the Local Government Pension Scheme who stated in 2016: “Collectively the £217bn LGPS funds are one of the largest 10 global sources of capital and can influence behavioural changes that lead to better stewardship by the global asset management community and the entities and places they live in”(3). Given their acknowledgment of this influence, many questions around the schemes investment in fracking and the wider fossil fuel industry have arisen.
Continued investment by local authorities in the fossil fuel industry is becoming untenable given the widespread acceptance that this is the cause of climate change and councils’ recent declaration of Climate Emergency.
Calls for divestment in fossil fuels have been obstructed by reference to ‘fiduciary duty’: the principle that pension funds must always be invested in the best interest of their pensioners. This has been successfully challenged, and environmental, social and governmental organisations can factor environmental issues into investment decisions (4). The argument however is becoming increasingly unnecessary as declining value of the fossil industry make ongoing commitment of council employees’ pension investments a dead duck.
Notes:
1- https://www.bbc.co.uk/news/business-478507752018/
3- https://www.lgpsboard.org/index.php/investment-2016oct/31/public-
4- https://theecologist.org/2018/oct/31/public-sector-pension-had-double-fracking-investments