Although Parliament has now been dissolved, following the calling of an election for 4th July, peers remained active up to prorogation on efforts to improve a number of Bills before the House. One of those Bills – which has since fallen – was the Economic Activity of Public Bodies (Overseas Matters) Bill, originally promised by Government to curb country-specific boycotts by public bodies.
Whilst the reach of the Bill went much wider than environmental concerns, peers tabled amendments which highlighted, and sought to resolve, drafting which cast doubt on the ability of the Local Government Pension Scheme (LGPS) to carry out stewardship of their investments by engaging with the companies in whom they invest and voting their shares at company AGMs. The Bill exposed private conversations with investee companies – for example about risky fossil fuel investments, lax environmental standards or anti-environment lobbying in the countries in which those firms operate – to the risk of litigation if they could argue that those conversation betrayed a moral or political disapproval of the countries in question. This risked a chilling effect on engagement with companies by the pension funds who ultimately own them, slowing the transition to net zero.
A second amendment sought to improve the drafting of the Bill, which did not allow the LGPS or other public authorities such as local authority procurement teams to take account of financial risks, including risks stemming from climate change or the wider environmental crises, in their investment and purchasing decisions. This would potentially discourage redeployment of capital from the dirty polluting industries of the past to the new clean technologies of the present and future.
A third amendment sought to address the extension in the Bill of the right to seek judicial review in such a way that members, investee companies or others could pursue cases in the court against local government pension funds, whether or not the cases were amenable to judicial review, even whilst The Pensions Regulator was investigating them – again discouraging stronger action on environmental protection by opening the door to vexatious claims from firms, or members standing in for firms, who stand to lose out from it.
At Committee stage, two of the amendments were debated for almost 2 hours on 14 May, attracting support from 11 peers from across the parties, with only 2 peers speaking against. Whilst Government’s arguments against the amendments appeared weak, no further dates were scheduled for continued debate until June, after the PM had called the election.
Without support from the other parties in Westminster, no agreement could be reached in the “wash-up” phase, which means that the Bill has fallen and will not become law. However, peers again demonstrated that expert sector knowledge, underpinned by technical briefing and system-level amendments can move the debate on protecting our environment on every Bill.
Watch Baroness Drake debate the amendments at Committee Stage here on Parliament TV: https://parliamentlive.tv/event/index/a4613c44-54a3-47a2-b4ce-de4fac6bfb3f?in=17:53:14
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