SCOTLAND’S largest local government pension fund has said it will drop investments in fossil fuel firms that fail to act on the climate emergency following calls from protesters.

Protesters gathered in Glasgow’s George Square on May 29 and 31 urging the city’s pension fund to end its "£508 million" investments in coal, oil and gas companies to tackle the worsening global warming crisis.

While the £24 billion Strathclyde Pension Fund has agreed to divest from companies which “don’t take their responsibilities on carbon or climate seriously”, it has not said that it will drop fossil fuels from its portfolio altogether.

The fund also disputes the claim it has £500m in fossil fuel investments, instead estimating its "direct exposure" is around £60m.

Friends of the Earth Scotland said that while the fund had taken a positive step, “there is much more to do in order to set Scotland’s largest public pension fund on a fossil-free path”.

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The fund has said that it will become one of the first major funds anywhere in the world to adopt a policy of divestment where companies do not meet environmental standards.

Members of the Strathclyde Pension Fund Committee agreed the move on June 2 in response to a call from Glasgow City Council – the fund’s biggest employer member.

In April, Glasgow City Councillors voted by a majority of 69 votes to 4 in support of divesting the pension fund from fossil fuels, but only the Pension Fund Committee is competent to enact this policy.

Councillor Richard Bell, who chairs the committee, said: “When it comes to securing a just transition to a low-carbon economy, Strathclyde has always been happy to put its money where its mouth is.

“The fund has long been a leader in terms of measuring and disclosing the carbon impact of its investments, using its clout as a shareholder to push for better environmental outcomes, and backing renewable energy.

“All of that will continue – and that is where we can perhaps have the greatest direct impact on the climate emergency.

“However, it’s important that we continue to be bold and to lead from the front – and that is why we have agreed divestment will play a part in our strategy in future.

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“We’re putting fossil fuel companies on notice that, if they don’t take their responsibilities on carbon or climate seriously, then we are prepared to drop them from our portfolio.”

Friends of the Earth Scotland divestment campaigner Sally Clark said: “The decision by Councillors today is a positive step, but there is much more to do in order to set Scotland’s largest public pension fund on a fossil-free path.

“Oil, gas and coal companies’ business model relies on worsening the climate emergency, damaging communities in Scotland and globally.

“Similar funds such as the Cardiff, Lambeth and Waltham Forest pension funds have already committed to go fossil fuel free and the Strathclyde Pension Fund can join them.

“The timing is critical. Divestment from climate polluters could provide global leadership as Glasgow prepares to host the crucial UN climate talks, helping lead billions of pounds into green investments. Glasgow can show that support for coal, oil and gas companies is incompatible with the action we need to avoid further climate breakdown.

“Huge praise must go to those local campaigners who have fought hard for years to convince our leaders that ending investments in fossil fuels is the right thing to do for people and the planet.”

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The fund will carry out an assessment of energy sector companies in its portfolios and set minimum standards, in consultation with its investment managers and sustainable investment specialists, Sustainalytics.

It will also seek to collaborate with other funds that are beginning to introduce divestment policies, including the New York State Pension Fund.

Where it is determined that companies do not meet standards, the fund will divest – with the committee agreeing this should be completed as quickly as possible while ensuring no detriment to financial stability.

However, Geraldine Clayton, a Strathclyde Pension fund member and climate activist, warned that these minimum standards had not been announced, and said it would better to divest from fossil fuels entirely.

She said: “As a retired member of Strathclyde Pension Fund, I don’t want my pension to be invested in the fossil fuel companies that are most responsible for causing the climate crisis, and I am pleased that the Strathclyde Pension Fund Committee is taking an important step today towards ending the pension fund’s £500 million fossil fuel investments.

“However, the Pension Fund Committee has not yet announced the minimum standards which it will use to decide whether to continue investing in companies. We now need councillors to ensure that the pension fund divests from climate-wrecking fossil fuels.”