Inverclyde Council has called on Scotland’s largest council pension fund to stop investing in arms and to commit to ethical investments.
A motion was passed this week after Inverclyde Council was told that Strathclyde Pension Fund (SPF) held shares in 11 of the world’s 20 biggest arms manufacturers, including some involved in the production of nuclear weapons.
The council’s decision has been welcomed by Campaign Against Arms Trade, Nuclear Free Local Authorities (NFLA) and Don’t Bank on the Bomb.
SPF said it would consider the council’s request and respond in due course, adding that environmental and social issues such as the arms industry and workers’ rights are factors already taken into account with its investments.
SPF has over 250,000 members and £20bn of investments. The Ferret revealed in 2017 that the SPF and other Scots council pension funds had £420m worth of investments in arms companies including nearly £12m in a US arms firm linked to allegations of war crimes in Yemen.
SPF’s investments – worth £174.9m in total – included £35m invested in Airbus which was involved in making Eurofighter jets being used in Yemen’s war. The fund had £3.7m invested in Raytheon, a US multinational with a factory in Glenrothes, which is at the centre of controversy for making laser guided systems for Paveway IV bombs used in Gaza and Yemen.
The motion put to the council meeting was proposed by Councillor Jim McEleny. He said: “The Strathclyde Pension Fund is known to hold shares in 11 of the world’s 20 biggest arms manufacturers, including some involved in the production or maintenance of nuclear weapons or their delivery systems.
“Any investments in nuclear weapons producers are at odds with the Treaty for the Prohibition of Nuclear Weapons .”
The motion called on the fund to adopt a statement of investment principles that explicitly set out the pension fund position on key ESG issues. These include climate change, human trafficking, child labour, the arms industry, tax avoidance and workers’ rights.
It also called for SPF to assess the risks associated with its investments concerning ESG policies, and to set targets for “positive, responsible investment in specific sectors, including low-carbon infrastructure, housing and low emission transport”.
Linda Pearson, from the Don’t Bank on the Bomb Scotland group, said: “We congratulate Inverclyde Council for passing this important resolution.
“Investing in nuclear weapons producers is at odds with the Treaty on the Prohibition of Nuclear Weapons, as the resolution states, and Strathclyde Pension Fund’s investment policies should reflect the fact that nuclear weapons are now banned under international law.
“It’s clear that there is growing opposition to Strathclyde Pension Fund’s unethical investments from its own member councils and we support Inverclyde Council’s call for the fund to divest from companies involved in arms manufacturing, including those involved in nuclear weapons production.”
Councillor Feargal Dalton, a NFLA Scotland Convener, said: “All council pension funds need to balance the need for a good rate of return with the ethical needs and views of its members and of the councils that underpin it.
“Divestment is a discussion that is very much worth taking place in local government and I welcome councillors bringing it forward to their own pension funds.”
Emma Cockburn, Scotland co-ordinator for Campaign Against Arms Trade, claimed “Inverclyde Council had “taken a welcomed step in the right direction” to join the growing list of local authorities within the Strathclyde Pension Fund “who no longer want to financially support arms manufacturers that profit from death and destruction”.
She called for other local authorities, such as Glasgow City Council, to follow suit.”
A spokesman for LPF said: “The Fund will consider the council’s request and respond in due course. However, it already works with a leading environmental, social and corporate governance consultancy to monitor the impact of investments and their expertise is available to assist investment managers.”
Don’t Bank on the Bomb Scotland says that 11 Scottish local authority pension funds together hold shares worth over £321m in 18 companies that undertake work related to nuclear weapons.
SPF has the largest amount invested, holding shares worth nearly £108m in 15 producers. Lothian Pension Fund comes a close second, with shares worth £105m in six nuclear weapons companies, while Tayside is in third place, with nearly £50m’s worth of shares.
Out of the nuclear weapons companies listed is Lockheed Martin which has attracted the largest share of Scottish council funds. Lothian and Strathclyde hold shares worth over £66m in the US arms giant.
Photo thanks to iStock/3D_generator.