The Luxembourg government needs to commit to a fossil-free sovereign pension fund
Luxembourg, 23 August 2021 – In light of the alarming conclusions from the recently published IPCC report [1], Greenpeace urges the Luxembourgish government to finally put an end to the climate-damaging investments of the country’s sovereign pension fund FDC (Fonds de Compensation). In his official response to the parliamentary question of 19 July 2021 regarding the FDC’s investments [2], the Minister in charge, Romain Schneider, fails to provide clear answers on how the fund intends to align its investments with the objectives of the Paris Agreement. Greenpeace demands that the FDC needs to adopt a coherent sustainability policy for all its investments, including a phase-out of climate-damaging fossil fuels and other carbon-heavy sectors, in its upcoming investment strategy review. The government’s credibility on climate protection is at stake.
“Although we are continuously witnessing the devastating consequences of climate change around the world, the Luxembourg pension fund is still investing in climate-damaging companies and does not follow an ambitious strategy in its pursuit of sustainability [3]”, said Myrna Koster, Climate Justice Campaigner at Greenpeace Luxembourg. “Social contributions from private sector employees continue to be invested into climate-damaging fossil fuels. In 2020, we have seen another rise in dirty coal investments. However, 47% of the Luxembourg population is not OK with this [4]. The fund’s management has so far only achieved marginal progress. Therefore we are urging the government to take a political decision to align the fund’s investments with the Paris climate objectives.”
According to Minister Schneider’s response to the parliamentary question, the FDC has taken some preliminary decisions before the summer break: it plans to regularly measure its carbon intensity, as well as its alignment with a 2°C scenario. However, such measures are not ambitious enough. Greenpeace demands a clear decision from the Luxembourgish government to require the fund to adopt the necessary measures to align itself with the Paris Agreement.
While the Bettel government is calling on its citizens to actively act on climate change, the country’s pension fund is allowed to continue shirking any accountability. Greenpeace expects a government that has ratified the Paris Agreement and has made unequivocal public commitments to implement clear sustainable and green investment guidelines for the FDC, to finally suit the action to the word [5].
“We cannot wait another 5 or 10 years for the fund to act. Climate change is here, and we can observe the devastating effects of climate change all over the world, including here in Luxembourg. The latest IPCC report gives a stark warning of where we are headed if urgent action is not taken“, said Martina Holbach, Climate Finance Campaigner at Greenpeace Luxembourg. “The government must act now. It should take the necessary steps for the FDC to put an end to its climate-damaging investments in order to finally become Paris-aligned.”
Notes:
[1] Greenpeace’s press release on the latest IPCC report is available here
[2] Parliamentary question by deputy Charles Margue and official answer by Minister Romain Schneider, available here
[3] Greenpeace’s analysis of the FDCs latest Annual Report available here
[4] TNS Ilres survey on behalf of Greenpeace Luxembourg, “Perception du changement climatique et des investissements du secteur financier”, May 2021, slide 23
[5] Coalition agreement 2018-2023, page 108