UBCM Releases Divestment Primer

A paper that considers divestment strategies in relation to the Municipal Pension Plan (MPP) has been released by Union of BC Municipalities. The study was prepared in response to a 2015 Convention resolution that was referred to Executive. The resolution (B120) sought information on fossil fuel related investments held by the MPP and the implications of divesting from these holdings.

The paper, Primer on Fossil Fuel Divestment (Primer), exceeds the resolution request by providing the range of fossil fuel related investments held by the MPP over several years, along with a background information on the MPP’s governance, administration and investment management.

In his comments on the Primer, UBCM President Al Richmond said that one of the facts that “jumps out” is that 75% of the funds that the MPP pays out to beneficiaries comes from investment revenue. “The Trustees have a fiduciary responsibility to act in the best financial interest of plan members,” said Richmond. “The whole MPP—employer and employee contributions—belongs to beneficiaries, so the Trustees and their service providers need to carefully weigh any proposed constraint on investment policy.”

The Primer also introduces the potential of a Climate Action Plan as an alternative to divestment.

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