Pension fund promises cleaner, greener investments after Ashfield criticism

The Nottinghamshire Local Government Pension Fund has 145,000 members and is valued at about £5 billion.

It is the pension fund for employees of Nottinghamshire Council, which administers it, of district councils and many other organisations.

However, Coun Lee Waters has accused the fund of investing, through the buying of shares, in companies involved in unethical or environmentally-unfriendly practices, such as the extraction of fossil fuels, which add to the climate-change crisis.

Coun Waters, Ashfield Independents member for Hucknall South, said: “The fund has a track record of immoral and socially irresponsible investments. We have a responsibility to members to invest appropriately.

"Some of the companies invested in would disgust members who benefit from the fund. Cleaning up our pension fund of dodgy investments should be a huge priority.”

But Coun Eric Kerry, fund chairman, has made it clear the scheme is ‘up for the green challenge’.

He has tabled a motion for a full meeting of the council which recognises the pension fund’s progress on climate change, including the setting-up of an action plan to ‘reduce its carbon footprint through responsible investment’.

Coun Kerry, a member of the ruling Conservative group on the council, said: “We have a huge obligation. We must deliver investment returns to pay for our members’ pensions.

“Nevertheless, our pension fund is not going to be left behind on climate change. We are very much up for the global challenge of transitioning to cleaner and greener investments.

“We will continue to use our voice as shareholders to encourage and cajole companies to meet their climate obligations.

“But this must be done in a just and well-managed way. Simply selling our shares to someone else who may not share our beliefs won’t deliver any change.

“The transition will take time, but the desire is there. Our fund can both meet the green challenge and protect members’ interests.”

Review

The fund has already agreed to review its investment in tobacco firms.

Coun Waters says other companies the fund has pumped money into have links to child slavery, animal testing and the production of recreational drugs.

Millions of pounds have also been invested in BAE Systems, the British arms, security and aerospace giant which is one of the largest manufacturers of military equipment and weapons in the world.

Asked whether the pension fund was comfortable with its link to certain firms, Coun Kerry issued a statement.

He said: “We want to drive change on the inside by persuading companies to make more responsible choices with their products and work.

“The fund actively influences companies through our investment managers, the Local Authority Pension Fund Forum and by exercising our voting rights.

“The pension fund also has a fundamental responsibility to our members to ensure their pensions get paid, and this takes careful consideration and planning with fund choices.

“The fund does not pick stocks and shares. We employ highly-trained investment managers to deliver returns that will enable us to pay the pensions of our members in the future.

“Swiftly divesting in a particular company could put our members’ pensions at risk and negate the purpose of our fund.”

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