Strathclyde Pension Fund accused of hidden investments by human rights group

A row has broken out after Strathclyde Pension Fund was accused of a lack of transparency over its investments by switching from direct shares in “problematic” companies into a type of holding called pooled funds.

The Scottish Palestine Solidarity Campaign (SPSC) made the claim against Strathclyde Pension Fund (SPF) after it emerged the fund no longer directly invests in arms firms at the centre of divestment campaigns. 

Instead, the SPF has moved to pooled funds which means it still invests in these companies but indirectly. The SPSC said this is a “much less transparent type of holding” adding it was given the impression that SPF had divested from some firms.

The SPF said in response it has “not once claimed” to have divested from companies adding that “the only people ever to have suggested that – wrongly – are the SPSC”.

SPF – Scotland’s largest council pension fund with over 250,000 members and £20bn of investments – has directly invested in hundreds of companies. The fund regularly publishes lists of its investments including the names of firms and details of how many shares it holds in each and their value in sterling.

But SPF recently switched to pooled funds, a way of putting sums of money from many people into a large fund spread across many investments and managed by professionals. Investing this way can be easier and less risky than buying shares in individual companies directly. 

Pension ‘complicit in illegal occupation’

The SPSC has been campaigning for years asking the SPF to stop investing in firms allegedly “complicit in Israel’s illegal occupation” of the West Bank. The Time to Divest campaign is supported by Unison Scotland. 

Firms targeted by SPSC include Boeing, Caterpillar, DXC Technology, General Dynamics, General Electric, L3Harris Technologies, Northrop Grumman, Raytheon Technologies, and Lockheed Martin.

These were all previously listed by SPF when it published details of its investments. But although SPF still invests in these companies, its latest asset list does not name them because the fund no longer invests directly. The names of 794 firms are no longer listed including arms, fossil fuel and mining firms, said SPSC.

The SPSC’s Gerry Coutts, who is also a member of SPF, expressed his frustration at SPFs “obfuscations”. 

He said the reason for SPSC’s campaign is that the “most basic human rights of Palestinians are being crushed on a daily basis”.

He added: “Our pensions are being linked to companies complicit in Israel’s military and settlement industry, helping to sustain violations of international law. Yet, the people in charge of my pension are refusing to take responsibility and to properly consider how and where they invest my money. 

SPF is not only on the wrong side of history, they are also behind the times.

Gerry Coutts, Scottish Palestine Solidarity Campaign

He added: “Who amongst us could ease our conscience by telling someone in the Occupied Palestinian Territories: ‘Sorry for your loss but my ethical investments only have ‘passive holdings’ in the weapons dropped on your homes.” 

Coutts claimed that the “SPF is not only on the wrong side of history, they are also behind the times”.  He continued: “At a time when more and more people understand the role of corporations in perpetuating situations of injustice and that we must invest responsibly and for our future, pension funds in Europe and around the world are taking decisions to divest – it is time SPF does the same.”

In response, however, the SPF strongly denied his claims and said it had already explained in detail to the SPSC what moving to pooled funds entailed.

A spokesperson for SPF said: “In fact, officers took considerable time at recent board and committee meetings to explain why this analysis was not accurate – and followed this up in writing with board members who had raised the question.

The investments remain open to scrutiny, as demonstrated by the fact data is so readily available to divestment campaigners.

Strathclyde Pension Fund

“For many investors, like SPF, the preferred way to invest in stock market indexes is through pooled funds. The investments remain open to scrutiny, as demonstrated by the fact data is so readily available to divestment campaigners – and, again, by the fact that fund staff explained the change in some detail for board members, including members’ representatives.”

Meanwhile, earlier this month Glasgow City Council endorsed a plan to end its £500 million investment in fossil fuels. The motion was approved by a full meeting of the council by a margin of 69 votes to 4 against. But the decision is not binding and must be approved by the SPF.

A ‘moral choice’

Louise King, of campaign group Divest Strathclyde, said: “Glasgow City Council has taken the pragmatic and moral choice to support divestment as quickly as possible.

“This is a big win for the divestment movement, but this is not the end for our campaign. It’s now the turn of the councillors on the pensions committee to make this decision binding. Until that is done, we will keep up the pressure to hold them accountable and ensure that they divest from fossil fuels as quickly as possible.”

Ric Lander, Friends of the Earth Scotland, said Glasgow City Council’s decision will be of “huge encouragement to everyone who’s concerned about the climate crisis and fossil fuel pollution”. 

He added: “The job isn’t done, however. All eyes will now be on the councillors on the pension committee who have the power to end this £500 million gamble on pollution. In the year of the UN climate talks, Scotland can only be a beacon for climate justice if our politicians make brave decisions.”

Cover image thanks to Istock/rrodrickbeiler

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