The chief executive of the Border to Coast Pensions Partnership has explained why she advocates engagement with some polluting companies rather than automatically divesting.
In an interview with Room151, Rachel Elwell said that divestment reduces the carbon footprint of individual investment portfolios, but it doesn’t necessarily decrease overall greenhouse gas emissions.
“Divestment has significant unintended consequences, an important one of which is letting carbon-intensive companies off the hook in the absence of responsible shareholders who are able to push them to make improvements and lessen their harmful impact on the world,” she said.
Border to Coast is one of the UK’s largest public sector pension pools, with assets totalling £55.7bn across 11 local government funds. It has set 2050 as its target date for reaching net zero.
Elwell stresses in the interview that engaging with all companies is critical to an effective transition to net zero.
“It would be easy to dismiss carbon-intensive companies as high-risk, too damaging to the environment, and divest. However, doing so risks oversimplifying what is a more nuanced and complicated matter.”
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