Local UK council pension funds have more than £9bn invested in companies engaged in fracking, despite fierce debate over shale gas exploration.
Some councils have more than 5 per cent of their funds invested in companies that use hydraulic fracturing to release gas from shale rock, according to research compiled by Platform London, 350 and Friends of the Earth, the campaign groups.
A third of the UK public said they were opposed to fracking in a government survey last year, compared with 16 per cent who were in favour. About half of respondents were neutral.
The extraction of previously inaccessible gas has divided opinion. Opponents argue that fracking causes environmental damage while supporters say it has revitalised the energy industry, creates jobs and provides cheaper energy. The issue has flared in the UK in recent months over the decision to allow Cuadrilla Resources, the shale gas explorer, to start fracking in the UK’s first commercial well in Lancashire.
“Fracking destroys local landscapes, threatens communities and fuels climate change across the globe. Council pension funds should be going to support clean fossil-free energy, which will secure a good return for members and help tackle climate change,” said Matthew Brown, leader of Preston City Council, a city in Lancashire close to where Cuadrilla will operate.
The data tracked exposures in March 2017, when local council pension funds had total assets of £290bn.
Funds with the biggest exposures as a proportion of their overall portfolio included Greater Manchester Pension Fund, the UK’s second-largest local pension scheme with assets of £17.2bn, and the £834m Dumfries and Galloway Pension Fund. The funds had exposures of 5.8 per cent and 6.7 per cent respectively.
Lancashire County Pension Fund has assets of £7.1bn, of which 2.6 per cent is exposed to fracking, although only via indirect exposures through passive investment products.