Tougher approach by West Yorkshire Pension Fund towards UK investments in fossil fuels
West Yorkshire Pension Fund Considered Divestment from BP and Shell
The West Yorkshire Pension Fund (WYPF) has been advised to consider divesting from oil and gas supermajors BP and Shell, following a review by consultancy firm LCP.
The LCP review outlines a possible engagement process, including an assessment framework and escalation pathway. The report notes that the fund's Local Government Pension Scheme belongs to the Northern Pool.
According to the LCP report, BP and Shell failed to meet all the minimum standards under the assessment framework. The report proposes that the fund sets clear minimum and ongoing expectations for fossil fuel companies, with divestment as a potential outcome if these expectations are not met.
The report suggests that divestment in isolation may be ineffective, but when combined with engagement, it could serve as an appropriate final escalation step. The LCP review does not specify what the minimum expectations for fossil fuel companies are.
BP and Shell are the largest fossil fuel holdings of the West Yorkshire Pension Fund, with investments of £169m and £379m respectively. The LCP report assessed BP and Shell against a criteria of having a credible pathway to net zero alignment and undertaking activities to transition effectively to a low-carbon economy.
The apportioned Scope 1 and 2 emissions are used as a basis for determining the WYPF's largest holdings. Apart from BP and Shell, other significant fossil fuel holdings of the West Yorkshire Pension Fund include Rio Tinto, AGL Energy, Glencore, Anglo American, RWE, Nippon Steel, Linde, IAG, and ArcelorMittal.
The threat of divestment was mentioned if minimum expectations are not met following engagement efforts by the WYPF. The report suggests an engagement process as a potential step before divestment.
As of August 2025, there is no specific public information available about the current status of WYPF’s engagement with BP and Shell regarding divestment due to climate concerns. For up-to-date and precise information, checking WYPF’s official communications or sustainability reports, or contacting their investment office directly, would be advisable.
- The LCP report suggests that the West Yorkshire Pension Fund (WYPF) could engage with BP and Shell, setting clear minimum expectations for all fossil fuel companies, including transitioning effectively towards a low-carbon economy and having a credible pathway to net-zero alignment.
- In the event that BP and Shell fail to meet these expectations, the WYPF may consider divestment as a final escalation step, acknowledging that divestment in isolation may be ineffective but could be more effective when combined with engagement.
- The WYPF's Local Government Pension Scheme, along with other large-scale pensions, plays a significant role in environmental-science due to its investments in fossil fuel industries like BP, Shell, Rio Tinto, AGL Energy, Glencore, Anglo American, RWE, Nippon Steel, Linde, IAG, and ArcelorMittal, and its potential financial influence in the energy sector in relation to climate-change initiatives.
