Gulf Oil Spill: is your pension in Deepwater?

MPs table EDM urging review of pensions regulations

Following the launch of our online campaign (Is your pension in Deepwater?) to urge the new Pensions Minister to strengthen the pension fund regulatory framework to protect scheme members from environmental and social risks, MPs have come on board in calling for such a regulatory review.

MPs Zac Goldsmith, Caroline Lucas and Martin Horwood have tabled Early Day Motion 209, DEEPWATER HORIZON OIL SPILL AND UK PENSIONS FUNDS, which calls on the Government to ensure that pension funds report fully on their policy and practice regarding environmental, social and governance risks. FairPensions urges all concerned individuals to contact their MP to ask them to sign up to EDM 209.

Furthermore, questions havebeen asked in Parliament by Labour peer Lord Harrison. In response, Minister for Welfare Reform Lord Freud conceded that pension funds may not be doing enough to exercise their responsibilities as owners of major companie.

Caroline Lucas MP said:

"The Gulf spill has clearly demonstrated that environmental disasters can also bring financial risks. Pension funds need to take environmental risks much more seriously, in their practices and not just their policies - and the regulatory framework needs to be updated accordingly".

Duncan Exley, Director of Campaigns for FairPensions said:

"UK pension funds' scrutiny of companies' exposure to environmental and social risk is inadequate. The BP Gulf spill is a stark example, but the problem is much wider. The failure of institutional investors to challenge poor corporate governance, short-termism and risky business models in the run-up to the financial crisis is now well documented. Then as now, pension fund members paid a heavy price for this neglect. We are urging the Government to implement simple, cost-free measures to help protect our retirement savings - and we need your help to make it happen."

Reacting to the financial impact of the Gulf spill at a recent energy conference, leading economist Nicholas Stern said of pension funds:

"Investing long-term in dirty technologies is actually risking their clients' money... I'm not criticizing them in a moral sense, they have to think carefully about where to put the money of their long-term pensioners. They have to be responsible investors".

London Mayor Boris Johnson has also waded into the debate, expressing concern about the impact of the disaster on British pension funds. From children to pensioners, 18 million Britons with investments in BP could be affected by the oil giant's tumbling share price. With the US authorities pressing BP to scrap its quarterly dividend - which accounts for £1 in £8 of dividend payments made to UK pension funds - and analysts speculating that BP could become a takeover target if the share price continues to fall, concern over how to protect retirement savings is mounting. BP's next dividend payment will be announced on 27 July. Any dividend cut would be the first made by the company in 18 years.