4. How is the Welsh Government working with local government colleagues to divest public sector pension funds from fossil fuel investments? OQ59293

We are working closely with colleagues. The Wales pension partnership discussed decarbonising local government pensions at the Partnership Council for Wales in November. Following your meeting with the First Minister in January, the WLGA has agreed to run an event in May with leaders and pension providers to discuss the next steps.  

I'm very grateful to the Minister for confirmation of that meeting and the session with the Welsh Local Government Association. The Minister will know that, in 2021, the Welsh Government produced the route-map for decarbonisation across the Welsh public sector by 2030, and it shows what can be achieved if the public sector works together on climate emissions. In the spirit of collaboration and in the spirit of the decarbonisation session with the WLGA, I wonder if the Minister agrees with me that that, there, is an opportunity where we can come up together with a new strategy to decarbonise the Welsh public sector pension fund by 2030.

I absolutely agree that working together to respond to the climate and nature crisis is the only way that we are really, really going to be able to make the improvements that have to be made. The whole pension system really needs to be responding to this agenda. It is true, of course, that local government pension authorities can be learning from each other and from across the public sector more widely. The meeting that I know, Jack, came about as a result of the work that you've been doing I think will be important in sharing that information. 

It's also important to recognise that pension owners are already taking some steps to decarbonise. So, it's important to recognise good practice where it is taking place. The local government Wales pension partnership announced a new decarbonisation initiative across £2.5 billion of its investments in April of last year. And again, I think that there are opportunities there to explore that good practice and see how it can be widened even further. 

I'm pleased this subject has been raised this afternoon. I have grave concerns over the decarbonisation of pension funds and how that will be implemented over a sustained period of time as a lot of public sector pensions rely on investments in fossil fuels. If you want a statement of fact, in the Member for Alyn and Deeside's own constituency, in Flintshire, they invested in renewables and clean tech way back in 2008 and 2009. So, you saw the perfect example in his own constituency of how a council can work proactively in decarbonising the pensions themselves without necessarily having the legislative framework in place to support that. 

But the question I want to ask, Minister, particularly around this is around the lowest-paid workers, some of whom fall within the Clwyd pension fund, which covers my constituency in Denbighshire. In terms of implementation, what would that look like in terms of protecting the lowest-paid workers so that we don't impoverish the lowest-paid workers who very committedly engaged in pension funds all their working career and want a reward when they do decide to retire? What steps is the Welsh Government taking to support the lowest-paid workers in Denbighshire in that sense? Thank you.

These would be matters, really, for the members of the pension board and the pension fund to be considering in terms of the investments that the fund makes. But that said, I think that green pension investments can be very good investments in terms of the way in which the current energy market is moving towards a greener and more sustainable way of delivering energy for the future. I know all of these things will be things that the pension scheme managers and so on are discussing with the pension board. Those specific investment decisions are really not for the Welsh Government, but for the pension boards themselves.