The $68bn United Nations pension fund is facing pressure from staff to undertake an analysis of its exposure to fossil fuels and publicly report on the results.
Earlier this month, the 46th Staff Council, the UN labour union representative body, supported a resolution on the issue at the UN Joint Staff Pension Fund (UNJSPF).
The resolution, seen by Responsible Investor, was supported by eight of the council’s members, with one abstention, at a meeting in New York on December 5. The resolution, though, carries no official power with the UNJSPF.
In September, the fund announced that it would divest coal investments by December 2020. But the resolution asks the fund to go further.
It requests that the fund’s pension board “urgently” develop and adopt a policy directing the Office of Investment Management (OIM), the body that manages the fund’s assets, to “phase out UNJSPF’s direct and indirect investments in companies engaged in fossil fuel production and exploration by 2025”.
The fund, it said, should take its cue from “major sovereign wealth and pension funds” that have taken measures to divest from fossil fuel assets and raises the spectre of “stranded assets”.
The document also questions the value of investor-corporate engagement; it “rejects” the view of Sudhir Rajkumar, the Representative of the Secretary-General (RSG) to the fund, that “constructive engagement with companies, including fossil fuel companies, can have a more meaningful impact compared to pure divestment”.
The council conclude the resolution by requesting that the text and result be passed on to António Guterres, the UN’s Secretary-General, who is also the fiduciary for the fund.
Neither Guterres’ office nor the OIM has responded to a request for comment.
But speaking of his disappointment over the result of the UN’s COP25 climate talks in Madrid result last week, Guterres said the “international community lost an important opportunity to show increased ambition on mitigation, adaptation & finance to tackle the climate crisis”.
It follows what Rajkumar described as a “challenging year” in 2018, which saw the UNJSPF’s investment returns for global equities fall to -8.7%, the worst performance in any year since the Global Financial Crisis of 2008.
The fund’s assets fell by more than $3bn between 2017 ($64bn) and 2018 ($60.4bn) but currently stand at around $68bn.