Obligations to consider climate risk in relation to the investments of the BP Pension Fund

ClientEarth warns the BP Pension Fund trustees that ignoring climate-related financial risks may constitute a breach of fiduciary duty and jeopardize member retirement outcomes. The letter outlines material risks associated with fossil fuel assets, highlights emerging market standards for climate-aware investing among OECD asset owners, and provides a detailed set of recommended actions for the fund to safeguard its assets and align with the Paris Agreement.

• Trustees of the BP Pension Fund have a legal obligation to act in the best interests of members, which includes considering climate change as a "potentially material investment risk" and evaluating the exposure of both the scheme's assets and its sponsor to such risks.
• Fossil fuel and carbon-intensive assets face significant transition and physical risks; specifically, 54% of EU coal power assets already have negative cash flow, a figure expected to reach 97% by 2030.
• Climate-aware investing does not necessarily reduce returns or limit diversification; analysis of the S&P 500 from 1926 to 2017 showed that excluding any of the 10 main market sectors had a "negligible" impact on performance.
• A review of 30 asset owners in OECD countries (excluding the US) indicates that climate risk is increasingly integrated into governance, with 67% of those reviewed having divestment policies in place.
• Global divestment from fossil fuel assets has reached USD 6 trillion in assets under management, with pension funds accounting for 50% of this total.
• ClientEarth recommends that the BP Pension Fund take specific actions, including reallocating capital away from coal and risky fossil fuel assets (such as tar sands and arctic exploration), adopting TCFD reporting frameworks, and ensuring portfolio company directors are "climate competent".

APA

ClientEarth (2018). Obligations to consider climate risk in relation to the investments of the BP Pension Fund. https://www.clientearth.org/media/f1lo5jr2/bp-pension-fund-legal-letter-ce-en.pdf

Chicago

ClientEarth. Obligations to consider climate risk in relation to the investments of the BP Pension Fund. 2018. https://www.clientearth.org/media/f1lo5jr2/bp-pension-fund-legal-letter-ce-en.pdf.

Wikipedia

{{cite press release |author=ClientEarth |title=Obligations to consider climate risk in relation to the investments of the BP Pension Fund |date=10 August 2018 |url=https://www.clientearth.org/media/f1lo5jr2/bp-pension-fund-legal-letter-ce-en.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{clientearth2018obligations, author = {{ClientEarth}}, title = {{Obligations to consider climate risk in relation to the investments of the BP Pension Fund}}, publisher = {ClientEarth}, year = {2018}, month = aug, url = {https://www.clientearth.org/media/f1lo5jr2/bp-pension-fund-legal-letter-ce-en.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }