Frequently asked questions (FAQs): corporate climate change strategy
Why is the carbon reduction target for East Sussex 13% per annum?
East Sussex uses the Tyndall Centre’s carbon budget tool calculator. This states a fair contribution towards limiting global temperature would be a 13% year-on-year reduction.
- Website: Carbon budget calculator
Why has the council not set 2030 as its Net Zero target date?
Our commitment is to become a carbon-neutral council as soon as possible and by 2050 at the latest. To achieve this, we have committed to a science-based reduction target of 13% per year. See our Climate Emergency Action Plan
- The Local Government Association supports this approach:
“There is no science to picking an end year where emissions are zero. Setting a target year by which emissions will be zero can be symbolically important. However, what counts is the trajectory of the commitments to carbon reduction between now and the target zero emissions year. This defines the actual level of emissions reduction being promised over the budget period. This is what matters to climate change.”
What’s covered by the council’s target?
The target and action plan covers the Council’s Scope 1 and Scope 2 own operation carbon emissions. These are emissions over which we have direct or (for schools) indirect control:
- electricity, gas and oil used in our offices and schools
- electricity for streetlights
- fuel used in our vehicle fleet and associated with business travel mileage
Scope 3 emissions from our supply chain are harder to quantify and control. Here we seek to influence change, especially for larger contracts. This may include setting criteria when procuring services.
Why does the council have a 2 year action plan and 5 year carbon target?
Changes to technology, policy and legislation are rapid. We need to be able to adapt our plans in line with these changes.
Why hasn’t the council stopped investing its pension funds in fossil fuel companies?
A very small proportion, less than 2 per cent, of the money in the East Sussex Pension Fund is invested in fossil fuel companies and this continues to reduce.
The council is just one of the organisations represented by the fund and its financial activities are separate from those of the council. Decisions are made by a Pensions Committee, whose members must set aside political views and interests when taking decisions, which must be made with proper advice and in line with regulations.
The Pensions Committee believes that engagement rather than blanket divestment from oil and gas companies is the most effective way to reduce global carbon emissions.
Engagement means the Fund can be an active owner and steward of its investments: driving positive change in companies while retaining governance and oversight of how its investments are used.
What is the Fund’s view on divestment and engagement?
The Pension Committee recognises the climate emergency and the financial risk this poses to the Fund. It also recognises that the Fund can benefit from investing in climate solutions; investing £480m in climate impact Funds in 2020.
Its responsible approach to decision-making is laid out in the Statement of Responsible Investment Principles.
- Website: East Sussex pension fund
Engagement can have more global benefit than simple divestment from fossil fuels. To sell shares in an oil and gas company will remove the carbon footprint from our portfolio, but it will not reduce global carbon emissions. These shares may be purchased by other investors who just want to make a quick profit through dividends or could move the companies into private markets where there is less governance and oversight to public markets.
However, the fund and its investment managers do recognise that divestment is necessary when companies are unresponsive to engagement and fail to plan for transition away from fossil fuels.
Our managers will, and do, make decisions to sell a company which fails to engage on climate or other matters. For example, one of our investment managers chose to stop investing in ExxonMobil in 2020 because of the firm’s failure to engage, disclose adequate emission data or align with the goals of the Paris climate agreement.
Collaborative engagement with other investors adds significant weight to our efforts to challenge companies and drive large-scale change.
- How much is invested in fossil fuels?
The Fund has already reduced investments in fossil fuel companies and this is continuing.
In June 2020, these represented 4% of its assets. As of September 2021, this has been brought down to 1.8% and decisions already made will further reduce this in 2022 when new investments have been implemented.
- What do we mean by fossil fuel companies in these figures?
Around half of these fossil fuel companies in these figures are utility firms – the companies that supply your electricity and gas at home. These companies may source all or most of their supply from renewables or rely on a mixture of renewable and fossil fuel sources. The interpretation of fossil fuels is different to many people and organisations and can be difficult to report and compare to others due to this inconsistency.
- How does the Pension Fund invest?
The Fund must invest in line with Local Government Pension Scheme Investment Regulations and as a result we need to be diversified, with investment in a range of fields. The Fund has produced a detailed in the website,
The Fund has a duty to protect the pensions of its 78,000 members, reducing the risk to them while keeping costs sustainable for the employers who pay contributions into the Fund for their employees.
The Fund does not actively choose to invest in a specific company, it invests in pooled products, either through shared local government investment pools, or through investment managers. This means the Fund will decide to invest in an asset class (for example shares, debt, property, infrastructure or commodities like gold) then it will go to a specialist manager to invest on our behalf.
Managers are chosen only after expert, detailed review to verify that the investment is safe and compatible with the Fund’s investment strategy including on climate change. As active stewards of the investments, the Fund and its advisers then challenge the investment managers over their performance and holdings. This challenge includes how they have engaged or challenged companies that may be high carbon emitters or have other Environmental, Social or Governance (ESG) considerations.
For further details visit, for the website of: