Sir Davey expressed this opinion during the House of Commons discussion regarding the financial and ethical risks of investments in fossil fuel companies by pension funds. During the debate, a third of MPs called their own pension scheme to divest its significant holdings.
While the UK is responsible for only 1.5% of global GHG emissions, companies on the London Stock Exchange that receive funds from pension funds account for 15% of GHG emissions. For this reason, Mr. Davey explained that the UK has the opportunity to massively impact climate change and decarbonise capitalism.
Recently, more and more pension fund trustees believe that ESG and climate change risks are financial considerations instead of moral considerations. For this reason they must consider the financial risks that may occur.
Now, the cross-party group of MPs called the £700m Parliamentary Pension Fund to limit its investments in carbon-intensive industries, and fossil fuel investments. The trustees will now produce a climate change investment policy.
However, another point of view is that by continuing to invest in oil and gas companies, shareholders could make a change. In fact, earlier this week 99% of BP's shareholders voted for a resolution forcing the company to describe in more detail how it meets the Paris Agreement targets.