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‘This cannot be right’: Councils investing £9bn in fracking through pension funds

UK local government pension funds currently invest over £9bn in companies engaged with fracking, it has been revealed. PSE’s Jamie Bennett-Ness reports.

Greater Manchester Pension Fund leads the way, investing almost £1bn in fracking, while some councils are investing more than 5% of their pension funds into the controversial shale gas exploration process.

The figures come from research compiled by campaign groups Platform London, 350 and Friends of the Earth and track local council investment in 2016-17.

Their report said: “Big companies like BP won’t frack in the UK because it ‘would attract the wrong kind of attention.’ But they have no problem getting their hands dirty in other countries.

“Our local councils are investing in these companies – and by investing, they’re supporting the fracking industry worldwide. Lots of local councils already understand the threat that fracking poses to their communities, and many have stood against drilling in their own areas. In Scotland, Wales and Northern Ireland fracking has been effectively halted, but local councils still manage pension funds investing heavily in fracking companies. This cannot be right.”

Fracking, the extraction process of using hydraulic fracturing to release gas from shale rock, has caused fierce nationwide debate in recent years, with opponents to the practice arguing that fracking causes large environmental damage.

Many councils have openly opposed fracking and a third of the UK public have said they disagree with the process, but supporters argue that it has revitalised the energy industry by providing cheaper energy.

The issue has flared up again in the UK in recent months after shale gas explorer Cuadrilla Resources was given permission to start fracking in Lancashire.

Despite a lengthy public campaign leading to Lancashire County Council rejecting Cuadrilla’s application, the company’s appeal was overturned by Sajid Javid, the former communities and local government secretary, meaning the first high-volume hydraulic fracking since 2011 could happen very soon.

The pension funds with the greatest proportion of overall investment in fracking included the Dumfries and Galloway Pension Fund at 6.73%, and the Greater Manchester Pension Fund, the UK’s second-largest local pension scheme, at 5.76%.

Both the Greater Manchester Pension Fund and Lancashire Pension Fund have not commented on the research.

In a statement, Dumfries and Galloway said its pension fund “considered socially responsible investment in the context of its legal and fiduciary duties” but “non-financial factors should not drive the investment process at the cost of financial return.”

Other pension funds which ranked highly included the London Borough of Merton, the Isle of Wight Council, and Welsh councils Torfaen and Dyfed, all investing over 5% of their fund on fracking.

Fracking has been banned indefinitely in France and Scotland and the UK has seen heavy protesting, especially in the Midlands and north of England.

Last month a survey found that 80% of Conservative councillors agree that fracking firms should be made to apply for planning permission for drilling.

The Campaign to Protect Rural England (CPRE) and Friends of the Earth carried out the poll, which also revealed that a smaller majority (65%) of Tory councillors think local authorities should grant final planning consent.

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Image credit -  Dave Thompson/PA Wire/PA Images