A spokesperson for IFM Investors told us that the fund publicly discloses its infrastructure equity assets. They added: “Natural gas is increasingly utilised as a transition fuel for decarbonisation globally … These assets benefit from investment from long-term, trusted capital partners like pension funds, who can reinvest in them and pave the way for carbon emissions reduction.”
LNG is often promoted as a cleaner alternative to traditional fossil fuels. However, a peer-reviewed study found it is 33% worse in terms of planet-heating emissions over a 20-year period compared with coal.
Worcestershire Pension Fund said it invests through structures that mean “exposure to any single asset is indirect, limited, and a very small component of a broader portfolio.” It said the Stonepeak fund in question “publishes detailed annual reports and complies fully with statutory disclosure requirements”.
A greener pension
When it comes to curbing carbon emissions, council pension funds and campaigners have tended to focus on selling their shares in companies like BP and Shell. But a growing portion of pension funds are invested in so-called “private markets”. Typically this involves putting money into a number of big funds, which in turn invest in everything from private equity to property to company loans.
Private markets can offer healthy returns. They’re also something of a black hole for information, which makes following the money much more difficult. And they’re often excluded from the scope of council climate commitments.
The upshot is that even pension schemes that have promised not to invest in fossil fuels have ploughed money into funds that are paying for major gas projects.
Take Waltham Forest Pension Fund, which in 2016 became the
first local authority to make such a commitment. Simon Miller, a former
councillor who chaired the pension fund committee, said the council
already had a number of green goals to improve the lives of residents.
“[But] we had a pension fund that was merrily invested in fossil fuels
that was absolutely out of lockstep with the political direction and
philosophy of the borough.”
The council’s pension fund proceeded to sell its investments in fossil fuel companies over the following five years.
According to its latest report, however, Waltham Forest is
still invested in funds managed by Global Infrastructure Partners that
have financed Rio Grande LNG and Allete, which owns an 18,000-acre coal
mine in North Dakota.