Isle of Wight pension savers are unwittingly bankrolling the rapid expansion of gas terminals in the United States.
Sixty local government pension funds – including Isle of Wight Pension Fund – have invested a total of £8bn into funds paying for the construction of gas ports all along the Gulf Coast, according to revelations by the Bureau of Investigative Journalism. Isle of Wight Council responds below.
Residents say these terminals are already causing health problems in their communities. Experts say they represent one of the biggest threats to the future of the planet.
The scale of UK pension exposure
Over seven million school staff, civil servants and other public sector workers either save with, or receive their pension from local government pension schemes. The revelations have sparked concerns among local councillors who oversee their pension funds and have urged them to get out of fossil fuels.
While the companies behind these projects are enjoying a boost from the war in Iran, they could tumble in value as the world switches to renewable forms of energy.
Baroness Hayman, a non-party political peer, told the Bureau,
“Many UK pension funds are already reducing their exposure to fossil fuels, recognising the risks these investments pose. But with £3 trillion held in UK pensions, and the climate and nature challenge growing, there is a clear opportunity to better protect savers from rising financial and environmental risks.”
Members of the local government pension scheme were dismayed to find what they were bankrolling.
Jane Thewlis, a retired social worker, said,
“The UK could be funding a safer, healthier future for all via renewable energy generated in the UK that is cheap, safe, clean and owned by us.”
A building frenzy on the Gulf Coast
The giant white orbs containing liquefied natural gas (LNG) look almost alien. Scores of these terminals are popping up along the 1,200-km stretch of Louisiana and Texas’ coastline, a building frenzy turbo-charged by Trump’s second term.
If all the planned terminals are built, they would generate the same amount of greenhouse gases each year as every EU country combined, says Jeremy Symons, a former official at the US environmental regulator.
What Isle of Wight savers are funding
Savers in Isle of Wight Pension Fund are invested in a huge infrastructure fund operated by JP Morgan Asset Management.
While this has substantial investments in renewable energy, it has a stake in Enstor gas, which operates gas storage facilities in the US South; and a 50% holding in Third Coast, which spilled over 1 million gallons of oil into the Gulf of Mexico in 2023.
‘We’re seeing our air quality deteriorate’
Roishetta Ozane, a resident turned activist, lives near a number of these gas terminals. She told us that pollution from the nearby gas, petrochemicals and oil infrastructure have caused asthma and an increase of cancer in the area – an account borne out by academic research.
She said,
“We’re seeing more women develop health issues that are living near these facilities, having pre-term babies or having miscarriages.
“We’re seeing our air quality deteriorate. We have a drinking water crisis.”
She said residents had to deal with noise pollution from construction and the flaring of excess gas from the terminals.
Two of her children have asthma. She told us the doctor said pollution may have exacerbated the seizures suffered by her son, who died last year. She said,
“When my son passed away, I was like, what are we doing this for?
“We’re fighting for our children, for our future, for our community, but yet they’re dying.”
In total, the Bureau of Investigative Journalism found eight US-based LNG terminals backed by UK pension money. Taken together, those terminals would give rise to more CO2 every year than the entire UK, several times over, according to Sierra Club data.
The problem with private markets
When it comes to curbing carbon emissions, council pension funds and campaigners have tended to focus on selling their shares in companies like BP and Shell. But a growing portion of pension funds are invested in so-called “private markets”. Typically this involves putting money into a number of big funds, which in turn invest in everything from private equity to property to company loans.
Private markets can offer healthy returns. They’re also something of a black hole for information, which makes following the money much more difficult. And they’re often excluded from the scope of council climate commitments.
The upshot is that even pension schemes that have promised not to invest in fossil fuels have ploughed money into funds that are paying for major gas projects.
In February 2024, West Yorkshire Pension Fund said it would no longer lend to the oil, gas and coal sector. According to the new standards set by the authority, councillor Andrew Scopes said, the decision to invest in a Stonepeak fund that bankrolled an LNG plant on Ozane’s doorstep would be “very difficult to justify”.
Thewlis, a campaigner and member of the scheme, said,
“We are particularly concerned if [West Yorkshire Pension Fund] is funding LNG infrastructure in the US, which is not compatible with a livable climate. We expect our elected representatives to use our money to fund a safe future – not to hasten the end of humanity.”
West Yorkshire Pension Fund said its environment, social, governance policy “takes account of the current status and role of gas and oil within the energy transition, particularly with regard to reliability, affordability and coal displacement”. It said LNG is seen as “a bridge between today’s fossil‑fuel‑dominated energy system and a future low or zero‑carbon one”.
JP Morgan declined to comment. Third Coast did not respond to requests for comment.
Isle of Wight Council responds
OnTheWight approached Isle of Wight Council with a series of questions based on the Bureau’s findings.
Will the council divest?
Firstly, OnTheWight asked,
“Now that the Isle of Wight Pension Fund’s investment in the JP Morgan infrastructure fund – with its stakes in Enstor Gas and Third Coast – has been brought to your attention, will the Pension Fund Committee take steps to divest? If not, how do you justify this investment to Isle of Wight public sector workers whose retirement savings are funding it?”
A spokesperson for Isle of Wight Council replied,
“Government requires all local authority pension funds to join an investment pool, and the Isle of Wight Pension Fund is in the process of joining the Central Pool alongside other council pension funds. Ultimately, pension fund investments will be managed directly by these pools on behalf of their funds and going forward it is the investment pool who will decide on the investments held and investment managers employed, not individual funds themselves.”
Did councillors know?
OnTheWight also asked,
“Were pension fund trustees and elected members aware that their investment in JP Morgan’s infrastructure fund included exposure to US gas storage and LNG infrastructure – including a company that spilled over a million gallons of oil into the Gulf of Mexico in 2023? If so, when did they become aware, and what action if any was taken?”
A spokesperson for Isle of Wight Council replied,
“The pension fund does not manage its investments directly and uses professional investment managers to do so but they must operate within an agreed approach as will the investment pool to which we will shortly belong.
“That approach recognises that Environmental factors can influence long term investment returns and the ability to achieve sustainable returns into the future. The pension committee always considers the Fund’s approach to responsible investment allowing for the financial impact of what are termed Environmental, Social and Governance (ESG) factors may have on investments and returns for the fund.
“The pension fund therefore always acts responsibility and takes these ESG (Environmental, Social and Governance) matters, including climate change, seriously and has a formal policy it regularly reviews in this area and also the approach adopted by investment managers’ who manage the fund’s money .
“The Fund believes that it can best use its position as a company shareholder in order to influence behaviour by companies for the better but the Fund will always retain the right to disinvest from certain companies or sectors in the event that all other approaches are unsuccessful. We will be seeking evidence that our policies have been adhered to in this regard.”
Does this breach your own climate commitments?
Finally, OnTheWight asked,
“In 2019 IWC declared a climate emergency. Does the Isle of Wight Pension Fund have any climate, ESG, or fossil fuel exclusion policies – and if so, do trustees believe this investment is compatible with those commitments? If no such policies exist, is the council considering adopting them?”
A spokesperson for Isle of Wight Council replied,
“The IW Pension Fund has separate policies and duties compared with the Council. The IW Pension Fund, through its trustees (the Pension Fund Committee), is legally expected to maximise returns on investments subject to its risk and adherence to the good practice on Environmental matters, as included in our adopted policies, is intended to provide extra financial value and ensure we can positively influence company behaviour.”
News shared by Josephine Moulds and Simon Lock, on behalf of The Bureau of Investigative Journalism. Ed
