National Trust struggling to end remaining fossil fuel investments

30 Jan 2023 News

Irises in the Old Garden, Hidcote, Gloucestershire, National Trust.

Sarah Davis, National Trust

The National Trust has nearly fully disinvested from fossil fuels, its director-general has revealed. 

Hilary McGrady told Civil Society News that the National Trust has reduced its fossil fuel holdings by 98% since announcing plans to completely disinvest in 2019.

Fossil fuel investments now represent around 0.1% of its more than £1bn portfolio but the charity is unable to sell them currently as they are held in private and illiquid investments.

As a result, the charity missed its target to completely disinvest by 2022 but it plans to sell the remaining fossil fuel investments “at the earliest opportunity”.

Meanwhile, the charity announced last week that it will be investing £65m over the next eight years in renewable energy at its 100 highest-emitting buildings as part of its plans for 2023. 

Divesting from fossil fuels

In 2019, the National Trust announced that it would stop investing in fossil fuel companies by 2022 in a bid to protect nature and the environment and tackle climate change. 

At the time, the charity had just over a billion pounds invested on the stock market, the returns from which were “an important source of income”. 

Accounts for the year ending 28 February 2022 show that the National Trust has made “significant progress” in reducing fossil fuel holdings to “de minimis levels” since 2019, with the amount being around £2m. 

McGrady said that 98% of the charity’s funds are now not invested in fossil fuels and that the “tiny residual amount” that remains will be removed over time. “We’re almost there,” she said. 

Peter Vermeulen, chief financial officer at the National Trust, explained that the final 2% of the charity’s holdings are in private and illiquid investments which “are being sold down at the earliest opportunity”.

“All listed fossil fuel investments have been sold out of. In several instances, it has resulted in a new ex-fossil fuel investment having been created that allows other investors to take the same steps,” he said.

He pointed out that there is no public market to trade these private and illiquid investments on, “so we need to wait for the investments to mature.” “Steps were taken in 2020 to stop any new commitments of this kind to illiquid holdings.”

Last week, the charity announced plans for 2023, which include investing £210.9m on conservation work over the next three years and a further £65m over the next eight years in reducing fossil fuel use at its most energy-intensive places. 

The latter, the charity said, is part of efforts to reach net zero by 2030 and a crucial step to protect the land, buildings and collections it looks after.  

Rebuilding teams post pandemic

In 2020-21, the National Trust lost £173m during the Covid-19 pandemic and made 1,767 of its staff redundant out of an overall headcount of 12,389. 

Tina Lewis, director of people at the National Trust, said this step was necessary to ensure the charity would remain financially stable in the longer term. 

“After making the redundancies that we knew would be essential to safeguarding the future of the National Trust, we froze recruitment for a period of time. Now we’re slowly taking steps to rebuild our teams,” she continued.

“We’re doing this cautiously, responding to gradually increasing visitor numbers and a return to a near normal programme of work and activity across the trust, but taking into account the challenging economic environment we are operating in. We’re still below our pre-Covid headcount.”

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