12 March 2025 

Dear Councillor Dixon

Your recent appointment as co-president of UK100.

We at Divest Tyne and Wear were very pleased to see that you have become one of 3 co-presidents of the national climate action network, UK100. We understand that the primary purpose of this organisation is to support a local-led, rapid transition to climate change, which we all desperately hope for.  We’re very pleased to see that members of the network (and we know this is also South Tyneside Council’s aim) have all pledged to meet their ambitious climate targets ahead of the Government’s 2050 goal. We’re glad to read that you’re passionate about climate change, as of course are we and all those who have some knowledge of climate systems and what they hold for the future if we continue to burn fossil fuels.

As you will know, South Tyneside Council is the managing authority for the Tyne & Wear Pension Fund, and has legal responsibility for the Fund, nominating eight members to the Pensions Committee.

The UK100 website includes an article about the 2020 Pensions Bill as it passed through Parliament. It contains the following paragraph: “Close to £3 trillion is invested in pension schemes in the UK. Yet the vast majority of those schemes do not take climate risk into account and savers are often unaware that a considerable amount of this money funds fossil fuels and other carbon intensive businesses. Stranded assets not only undermine our efforts to decarbonise our economy, but also put our savings and retirements at risk.” – Sophie Lethier Report, UK100 website.

We hope that you will be aware of that, and the latest reports on climate and financial risk: the Institute and Faculty of Actuaries’ report (published 16 January) has a stark warning about the consequence of pension fund trustees being given misleading advice about climate risks. The report says that climate risk modelling has produced “widely used but deeply flawed assessments of the economic impact of climate change" findings. It projects a global economic contraction of 19% by 2050 and 50% from 2070 to 2090 unless current approaches change: https://actuaries.org.uk/news-and-media-releases/news-articles/2025/jan/16-jan-25-planetary-solvency-finding-our-balance-with-nature/.
Its previous report also exposed the limitations and assumptions of climate change scenarios commonly used by financial services:  https://actuaries.org.uk/media/qeydewmk/the-emperor-s-new-climate-scenarios.pdf.

These seem to agree with UK100 that the risks posed by continued investments in fossil fuel producers (and others, but these are the primary threat) are preventing a rapid transition to tackling climate change and undermining councils and others who are aiming to meet their climate targets. BP and Shell’s recent backtracking on their transition targets emphasises that the current T&WPF policy of engagement with such companies is ineffective.

As we’re sure you’re genuine in your passion to transition away from fossil fuels, we’re wondering whether you could let us know how South Tyneside Council intends to use its influence as manager (and provider of the majority of committee members) to support the Pension Fund to move away from fossil fuels more rapidly?

We also understand that one of your UK100 roles is to ensure that the organisation agrees on and campaigns for legislative and regulatory change. This is a key moment for pensions as the Government’s “Fit for the Future” Bill on pensions reform is prepared. Currently, it contains no reference to investment strategies linked to sustainable and green solutions to the climate crisis. This is certainly a wasted opportunity and worrying that the most important issue facing us all has not been included. We would be grateful to hear from you whether this is an issue that UK100 will be campaigning on.

A further change, that would enable Pension Funds to move more quickly on this issue, could be a change in the legal definition of fiduciary duty.  This is currently being discussed at a number of levels (see this recent article https://www.netzeroinvestor.net/news-and-views/uk-master-trust-seeks-pension-ministers-backing-to-review-fiduciary-duty). Again, could we ask if this is a change that UK100 will be supporting and campaigning on?

We would appreciate the opportunity to meet you to seek your advice on these matters and continue this discussion on how we can work together on our common goal.

Thank you for your time, and good luck in your new role.

Best wishes, Divest Tyne & Wear campaign