North Yorkshire County Council, which will decide a planning application next year for hydraulic fracturing, has defended pension fund investments in the fossil fuel industry.
Frack Free North Yorkshire (FFNY) has accused the council of a conflict of interest. Documents released under a Freedom of Information Act request showed that in March this year the North Yorkshire Pension Fund had £101million invested in fossil fuel companies and their financial backers.
The county council said the fund was independent of council activities. It was administered on behalf of 120 organisations. Fossil fuel investments made up 4% of the total fund.
Frack Free North Yorkshire (FFNY) picked out the fund’s investments in Barclays (£15m), Halliburton (£1.2m), Total (£5m) and GDF Suez (£2.14m)
Up to October, a subsidiary of Barclays (Barclays Natural Resource Investments) owned 97% of Third Energy. Third Energy is the company which is applying for permission to frack at Kirby Misperton in North Yorkshire. A management buy-out of Barclays Natural Resource Investments has since led to the creation of Global Natural Resource Investments.
FFNY says Halliburton is one of the Third Energy’s supply chain partners and will provide chemicals for the fracking process and Kirby Misperton.
GDF Suez is a partner of Cuadrilla in the newly-awarded licence SE95, near Driffield in East Yorkshire. Total has an agreement with Egdon Resources to develop licences in the Gainsborough trough area of the East Midlands.
Russell Scott, of Frack Free North Yorkshire, said:
“We are of course very concerned about these investments. Next year the NYCC will be deciding on Third Energy’s fracking planning application at Kirby Misperton, which if passed would directly benefit the council itself, as it has shares in Barclays and Halliburton.”
“This appears to be a clear conflict of interest and calls into question the legitimacy of the entire decision-making process.”
He said the documents also showed the pension fund had £0.6m, less than 1%, in green renewable energy.
“This is a tiny fraction when compared to the mammoth £101m in fossil fuel companies and their financial backers.”
He urged the fund to divest from all financial investments currently held in the companies and put them instead into what he described as “green, sustainable and socially-responsible companies”.
In a statement this evening, North Yorkshire County Council said the pension fund was “conducted completely independently” from council activities and its role as a planning authority. It said the fund was managed on behalf of 120 organisations, of which the council was just one.
“As the Fund is a ‘Defined Benefit’ scheme, there is a single fund with a range of underlying investments made on behalf of all beneficiaries. The Fund’s investment in companies engaged in fossil fuel activity amounts to just four per cent of the total Fund.”
“As a long-term investor charged with looking to the interests of beneficiaries over many decades into the future, the Fund recognises climate change as a significant risk factor for our pension fund investment. Through its participation in the Local Authority Pension Fund Forum (LAPFF), the Fund’s engagement strategy is to push for an orderly carbon transition by requiring companies to identify and tackle carbon risks in their business models.”
“The Fund does have an increasing level of investment in renewable and low carbon energy production and will continue to make such investments where the risk/return profile fits the pension fund’s investment strategy.”