On 4 March 2020, the Strathclyde Pension Fund committee decided to postpone a decision on whether to divest from fossil fuel companies. The meeting of the pension fund committee had been picketed by campaigners calling for more sustainable investment policies, including from Unison, one of the largest trade unions representing the staff whose pensions were affected. Viewed from October 2020, divesting from fossil fuels now looks like a much more attractive option. The Strathclyde Fund lost 5% of its value in the 2019-20 reporting year with the fossil fuel companies being amongst the biggest losers.
2020 has seen massive changes in the value of enterprises across the world so it is not surprising that a Pension Fund with assets of over £20 billion should face challenges. Some of the largest winners and losers during the pandemic have been in the transport sector, with airlines being big losers, and parcel delivery firms emerging as winners. The disruption has widened the gap between the organisations with a strong future and those that were in decline.
Across the world pension funds are big transport investors. What are the transport investment opportunities with a strongest future? For too long transport investment has been viewed mainly from the perspective of financial and physical capital growth. However, this is changing. For example, the Scottish Government’s advisory group on the economic recovery has proposed four economic pillars for investment: financial and physical capital, natural capital, human capital, and social capital. The greatest potential for future growth is shifting the investment balance towards natural, human and social capital. How can more social business models and greater environmental benefits be part of the regeneration of the transport sector?
The networks of relationships that allow society to function better, also underpin the economy. Government must accept a more active role in building these relationships. This includes viewing some transport services as investment in social capital rather than revenue liabilities, and finding new ways to make labour markets more secure for more of society. Provided performance against citizen driven service goals is built into the business models of smart places, investment in streetscape for towns, zero carbon bus services to key local destinations, and safer places and streets, could be amongst the most attractive investment prospects for transport’s economic recovery. However, new business models and ways of working are needed.
New approaches emphasise the need for improved accessibility, equity, quality, emissions reduction, and require collective action in local place making. Whilst these goals are now common in policy, only weak progress has been made translating them into investment programmes. Critically the role of national government in investment is rarely viewed as that of an an enabler or trusted partner. The government stake remains largely defined by its financial contribution rather than its social goals.
Sustainable transport can help to lead the sustainable economic recovery from the global pandemic. The time is right for a new approach to powering transport with renewable energy, and investing in business models that link transport with its impacts. With current business models shattered there is no better time to change the investment strategy. The collective actions we have seen during the pandemic have been inspiring demonstrations of latent social capital. For many years, localism was in decline, but the pandemic has accelerated a shift that was already happening away from globalisation. The experiences of 2020 show that more sustainable investment options can be rapidly scaled into working business models for smarter transport and places. These new sustainable investment projects could be delivered just as quickly as the legacy projects highlighted in the draft national investment plan.
The recovery urgently needs more collaborative approaches, building trust in all those engaged in delivering the future of transport. In early October Ocado became the UK’s most valuable grocer, not because of the volumes of groceries sold, but because of its ability to build new types of relationship. It is time to grow the smarter travel business models to make more of transport’s connections.