Belfast Telegraph

Northern Ireland public sector pension cash funds tobacco firms and arms trade

A major pension fund for public sector workers here has millions of pounds tied up in controversial investments.
A major pension fund for public sector workers here has millions of pounds tied up in controversial investments.
Lauren Harte

By Lauren Harte

A major pension fund for public sector workers here has millions of pounds tied up in controversial investments.

The Northern Ireland Local Government Pension Scheme has shareholdings in the tobacco industry, the arms trade and companies heavily criticised for not paying enough tax. Money is also invested in firms linked to fracking and alcohol.

In some cases, shareholdings appear to directly conflict with some of the members' core aims.

For example, the decision to invest tens of millions in tobacco companies may sit uncomfortably with staff at the Northern Ireland Hospice, who are members of the scheme.

The hospice said it had not been told of the investment.

The scheme is managed by the Northern Ireland Local Government Officers' Superannuation Committee (NILGOSC).

Comprising around half the public sector workforce - including councillors, teachers and the Fire and Rescue Service - it manages the pensions for 118,000 people across around 200 organisations.

NILGOSC said its main duty is to act in the best interests of the scheme beneficiaries.

Analysis of the committee's equity holdings shows investments totalling more than £2.2 billion in around 600 companies. The investments range from £73m in to £36,000 in Ecosynthetix, a renewable chemicals company. A further £4bn is tied up in pooled funds.

However, some of the investments will be controversial.

NILGOSC has pumped £40.2m into British American Tobacco, the international company behind Dunhill and Lucky Strike cigarettes, with a further £1.3m going to Philip Morris International, which makes Marlboro and other leading brands.

The hospice, whose members' pensions are looked after by NILGOSC, said "there has been no communication from NILGOSC regarding where they invest their funds".

The fund also invests in some multinational companies with interests in shale gas exploration.

Its holdings include energy giants BP (£31.1m), gas firm Centrica (£10.4m), mining firms Rio Tinto (£6.3m) and BHP Billiton (£5.7m), and oil company Exxon Mobil (£4.7m).

Local environmentalists called on NILGOSC to take its money out of these firms.

Green Party Ards and North Down councillor Rachel Woods has her pension managed by NILGOSC. She said having it invested with companies exacerbating climate breakdown is disturbing.

Ms Woods said: "We've been lobbying for pensions scheme managers to end their involvement with fossil fuel industries for some time. I've also met with trade unions to discuss this matter. Workers should have full disclosure and be given a say on how their pensions are invested."

Friends of the Earth's James Orr said NILGOSC "will be on the wrong side of history" if it does not divest from the fossil fuels industry.

In the 12 months to March 31 last year, NILGOSC had holdings worth £2.9m in Britain's biggest arms company BAE Systems, which has provided equipment to the United States for the wars in Iraq and Afghanistan.

Meanwhile, two of the world's biggest aerospace and defence firms, which have produced technology used in the Syria conflict, are on the NILGOSC list.

Lockheed Martin, which makes guided missiles, rockets and fighter jets, has received £3.6m, while Northrop Grumman, which builds bombers and drones, received £2.9m.

Some £5.1m is invested in missile and weapons manufacturer Boeing, while Rolls Royce, which produces military aircraft engines, has also received investments totalling £2.4m.

Andrew Smith of Campaign Against Arms Trade says public money should be invested in the public good and not to boost arms companies which fuel and profit from war and conflict.

"Local authorities should strive to have a positive global footprint and lead by example. NILGOSC should end these investments and instead set a positive precedent by adopting an ethical investment policy," he added.

Around £3.7m is invested in Diageo, a leading producer of spirits and beer, and £1.8m in Heineken.

Among the top 20 international firms the fund invests in are Amazon (£73m), Facebook (£49.9m), Netflix (£29.3m) and Google parent company Alphabet (£23.7m), which is worth a combined £176m.

Several of these companies have come under fire over how much tax they pay in the UK.

NILGOSC said: "NILGOSC's overriding obligation is to act in the best interests of the scheme beneficiaries."

It said the body invests in a wide range of asset types across the world and appoints fund managers who select the stocks for their particular mandate.

It added the fund is currently invested in, locally and globally, manufacturers of electric vehicles, wind power, solar power, hydropower, biomass and energy conservation.

It said: "NILGOSC has instructed its active fund managers to take account of environmental, social and corporate governance (ESG) considerations provided the primary financial obligation is not compromised and will ensure that the fund managers it appoints are capable of appropriately considering ESG issues when making investment choices.

"NILGOSC shares concerns over climate change and carbon issues and works at both a fund and an industry level to further climate action."

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