Obligations to consider climate risk in relation to the investments of the Ford Salaried, Hourly Paid Contributory & Senior Staff Pension Fund

ClientEarth warns the Ford Pension Fund trustees that failing to consider climate change as a material financial risk may constitute a breach of fiduciary duty. The letter outlines the financial risks of fossil fuel assets, the opportunities in low-carbon investments, and emerging market standards among OECD asset owners. It concludes with a detailed set of recommended actions, including asset reallocation away from coal and the adoption of TCFD-aligned reporting.

• Trustees of the Ford 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 the scheme sponsor to such risks.
• Fossil fuel assets, particularly coal, are highly exposed to climate risks; 54% of coal power assets in the EU already have negative cash flow, a figure expected to reach 97% by 2030. Additionally, operating costs for coal are projected to exceed those of onshore wind by 2024 and solar power by 2027.
• 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, and MSCI low-carbon indices yielded returns slightly better than the benchmark MSCI ACWI index up to 2016.
• A review of 30 asset owners in OECD countries (excluding the US) indicates that 67% have divestment policies in place. Globally, investors representing USD 6 trillion in assets under management have committed to divesting from fossil fuels, with pension funds accounting for half of that amount.
• ClientEarth recommends that the fund take specific actions to mitigate risk, including ceasing new investment in coal and risky fossil fuel assets (such as tar sands and arctic exploration), moving passive investments to low-carbon indices, and adopting the TCFD framework for disclosure.

APA

ClientEarth (2018). Obligations to consider climate risk in relation to the investments of the Ford Salaried, Hourly Paid Contributory & Senior Staff Pension Fund. https://www.clientearth.org/media/xoflucta/ford-pension-fund-legal-letter-ce-en.pdf

Chicago

ClientEarth. Obligations to consider climate risk in relation to the investments of the Ford Salaried, Hourly Paid Contributory & Senior Staff Pension Fund. 2018. https://www.clientearth.org/media/xoflucta/ford-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 Ford Salaried, Hourly Paid Contributory & Senior Staff Pension Fund |date=10 August 2018 |url=https://www.clientearth.org/media/xoflucta/ford-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 Ford Salaried, Hourly Paid Contributory \& Senior Staff Pension Fund}}, publisher = {ClientEarth}, year = {2018}, month = aug, url = {https://www.clientearth.org/media/xoflucta/ford-pension-fund-legal-letter-ce-en.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }