Latest news about ethical consumerism


BP disaster shows environmental risks to UK pensions

Jun 11

Written by:
11/06/2010 16:41  RssIcon

Cross-party group of MPs call for investment funds to examine environmental risks

BP's Deepwater oil disaster shows that UK pension funds need to do more to assess the environmental risks that their investments - and our pensions - are exposed to. Three MPs, Zac Goldsmith (Conservative), Martin Horwood (Liberal Democrat) and Caroline Lucas (Green Party) have lodged an Early Day Motion that calls on the government to make pension funds report fully on their policy and practice regarding environmental, social and corporate governance risks.


The move comes after activist investors demanded that BP, Shell and RBS report fully on their exposure to risks related with their involvement in the Canadian tar sands - "the biggest climate crime in history".


Last year BP dividends amounted to £1 in every £7 paid out by the FTSE100. UK pensions are exposed to BP shares, while the oil giant's ongoing environment disaster means that the company is under pressure from the US government, which wants BP to use the money to pay for the Gulf of Mexico clean-up instead.


The Early Day Motion says uncertainty over BP’s share price and dividend will hit ordinary pension savers. It adds: “This incident clearly demonstrates that environmental risks are also financial risks."


BP's directors are to meet on Monday to decide whether to suspend its dividend. BBC business editor Robert Peston expects that it will agree a reduction in the dividend payment - the first made by the company in 18 years.

In the House of Lords Labour peer Lord Harrison, asked whether the new coalition government would consider strengthening the reporting requirements of pension funds on their exposure to environmental, social and corporate governance risks. In response, Lord Freud, Parliamentary Under-Secretary of State at the Department for Work and Pensions, said: “This raises the what extent are pension funds acting responsibly with regard to their ownership responsibilities to companies?”



Full News Archive


Ethical news archive going back to July 2009.

Read More