Carbon in the Ledger: A Ratepayer’s Audit of Council Pension Investments

Britain’s councils have become fluent in the language of climate emergency. Yet the same authorities often administer pension funds whose investment portfolios remain deeply exposed to coal, oil and gas. The contradiction is rarely a secret. It is usually buried in an annual report, a committee paper or a pooled fund fact sheet that nobody has been asked to explain in public.

This is not an argument for ignoring fiduciary duty. It is an argument for applying it honestly. A pension fund exists to pay members’ deferred wages over decades. Climate risk is therefore a financial risk, not a decorative concern. If a fund is financing the expansion of fossil fuels while its sponsoring council claims to be leading on decarbonisation, ratepayers and scheme members deserve a clear account of why.

Begin with the administering authority

Most council pension funds in England and Wales sit within the Local Government Pension Scheme. Find the administering authority, which may be your county council, a London borough, a metropolitan district or a combined authority. The fund is not the same as the council’s general budget. It has its own accounts, its own committee and its own statutory responsibilities.

Start with three public documents: the pension fund annual report, the statement of accounts and the investment strategy statement. Search each for the fund’s total assets, its investment managers, its pooled fund arrangements and any climate risk disclosure. Do not rely on the summary in a press release. Go to the notes and the appendices, where holdings and commitments are more likely to appear.

If the published material does not list underlying holdings, make a written request to the administering authority. Ask for a schedule of direct equity holdings, the names and values of pooled funds, and, where the fund can obtain it, look-through data showing the underlying companies held within those pools. Request the information at fund level, not member level. Ask for the most recent quarter and the same quarter one year earlier so that changes can be tracked.

The Freedom of Information Act applies to the administering authority. Commercial confidentiality may be cited, but it is not a blanket veto. Public interest in the stewardship of billions of pounds of deferred pay is substantial. Frame the request precisely, keep it narrow and be prepared to challenge a refusal that treats basic portfolio transparency as a trade secret.

Read the committee architecture

A pension fund is not a monolith. It usually has a pension committee, a local pension board and sometimes an investment subcommittee. The committee may delegate manager selection, voting and engagement to officers or external advisers. Your campaign will be weaker if it shouts at the wrong body.

Download the committee’s terms of reference. Read the minutes for the past year. Look for the investment strategy statement, the climate risk report, the stewardship report and any voting record. Check whether the fund has a net zero target, interim targets, an exclusion policy or a commitment to engage with high-emitting companies. Then compare those promises with the holdings you have obtained.

Attend the public session of the pension committee. Ask a short, factual question and put it in writing in advance. Do not ask whether the committee cares about climate change. Ask how many millions of pounds are invested in companies with fossil fuel expansion plans, how that figure is monitored and what would trigger divestment. A precise question is harder to answer with a slogan.

Turn the numbers into a public record

Build a simple table. List the largest fossil fuel holdings, their value, their share of the fund and the reason each company appears. Use the fund’s own disclosures first. Where pooled funds obscure the picture, note the gap and ask the manager for look-through data. Do not overstate precision you do not have. A campaign built on one inflated number is easy to dismiss.

Then place the figures beside the council’s climate action plan. If the council has declared an emergency, what does its pension fund’s exposure mean for that declaration? If the fund says engagement is working, what are the milestones and deadlines? If it has an exclusion policy, why do certain holdings remain? These are not gotcha questions. They are the basic tests of consistency.

Publish your table. Send it to councillors on the pension committee and to the pension board. Ask for a deputation at a public meeting. Brief local journalists with the documents, not with speculation. Encourage scheme members to write to their union representatives and to the administering authority. Divestment campaigns are strongest when they connect the climate argument to the pocketbook argument: this is members’ money, and it is being exposed to transition risk without a public plan.

The questions that cannot be dodged

Ask the fund to publish a divestment plan with dates, scope and reporting. Ask whether it will stop new investments in fossil fuel expansion. Ask how it votes its shares and whether it publishes a full voting record. Ask how pooled fund managers are instructed on climate risk. Ask what the fund’s own climate scenario analysis says about stranded assets.

None of this requires a conspiracy. It requires paperwork, persistence and a refusal to accept that a climate emergency stops at the door of the pension committee. The ledger is public. The contradiction is auditable. Start there.