Green councillor from Bildeston quits Babergh committee over lack of action on selling 'dirty' fuel investments

By Derek Davis

19th Jan 2022 | Local News

A Bildeston based opposition Babergh councillor has quit the authority's audit committee over fossil fuel investments, fearing it puts more than £11million of public funds at risk.

Babergh District Council's audit committee recommended to the coalition cabinet that it pushes its fund managers to take into account environmental, social and governance (ESG) considerations in their investments and withdraw funds from investments which didn't address carbon reduction priorities.

Last week the Conservative, Independent and Liberal Democrat cabinet agreed to monitor investments and look to make changes at the appropriate time as long as the financial situation allowed.

Robert Lindsay from the opposition Green group said the council shouldn't hold any investments in fossil fuel extraction firms if it wants to meet its commitment to net zero carbon by 2030, which it made when declaring a climate emergency.

Cllr Lindsay, who represents North West Cosford ward at district level also highlighted that the cabinet's decision had not defined when an appropriate time to sell those investments would be.

The representative from Bildeston then resigned from the audit committee in protest.

But the administration dismissed claims it would put £11m at risk, and said it needed to make changes to investments in a way which would not lose money.

Cllr Lindsay said: "The facts are UK public pension funds have lost £2billion on their oil investments in the past four years.

"This year, oil and gas companies will make profits as energy prices rocket but these losses can't be recovered.

"Most City investors now agree with former Bank of England governor Mark Carney that all fossil fuel extraction stocks are now high-risk investments that will plummet in value as renewables take the place of fossil fuel. This will leave Babergh sitting on heavy losses.

"Apparently council leader John Ward and his cabinet know better than these experts.

"They are demonstrating yet again that either there is something about the word 'emergency' they do not understand, or that they simply do not believe it is caused by fossil fuel emissions.

"They are putting £11m of residents' money at risk which I cannot support. I will be resigning from the audit and standards committee and devoting the time freed up to supporting my residents."

Simon Barrett, Conservative cabinet member for finance who was on the audit committee in May when the recommendation was made, said £6m was in a property investment, while two tranches of £2m each were in pooled investments.

"The decision we took was that where we have a choice going forward we would go for the zero carbon option, but won't do it at the expense of losing money to the council and residents," he said. "We will take the responsible action in a timely manner.

"We are not saying we are not going to do it, but we are going to do it in a fiscally-responsible way."

Cllr Barrett said the authority was already demonstrating its commitment to the climate emergency, such as converting its fleet of refuse trucks to hydrotreated

vegetable oil fuel and green energy measures at its leisure centres. Council leader John Ward said that "returns over the past year have remained good and we are not jeopardising our investments," adding: "The Greens talk about ESG but focus only on the environmental aspects of this and totally ignore the social and governance aspects. "The cabinet's recommendation is to monitor our investments in relation to all three aspects and make changes to strengthen ESG performance within acceptable financial considerations. I fail to see how anyone could criticise such a prudent approach." Councillor Bryn Hurren who chairs the audit committee told the cabinet meeting: "We don't want to lose any money, and as chair, I was very strong on that and I wouldn't accept any vote that would leave us in financial trouble, but the way the world is going we have some investments that are slightly underperforming and I think the fact they are invested where they are could be one of the reasons for that. "I know not all the money is invested in dirty fuel but the fact it is there does make a difference, I think in future people will shy away where it has got this taint to it, so  do think we need to be sharp on our feet and look ahead."

     

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