Funding a New Green Investment Bank
Local government pensions fund investments in England and Wales were collectively worth £287 billion as of March 2019, according to central government figures. Many funds, in their schedules of investments, show substantial direct stock holdings in major oil companies. The reason for this is not hard to guess at: oil companies (unlike e.g. tech stocks) pay regular dividends and by investing in them directly, pension funds avoid management fees associated with indirect investment, via unitised trust funds. Trustees will be attracted to investing in oil stocks especially where they interpret their fiducial duty as being purely to maximise medium- and long-term financial gain. Less progressive trustees may be resistant both to adopting an ethical investment policy and to acknowledging the (increasing) longer term risk attendant in oil industry investments, as the energy transition progresses.
