Holyrood’s £82 million pension fund is to be reviewed after campaigners questioned whether some of its investments were ethical.
The Ferret revealed on 9 December that MSP pensions were being invested in arms, fossil fuels, tobacco and companies run by powerful supporters of the Russian leader, Vladimir Putin.
We reported that over £100,000 had been given to a Taiwanese company, Hon Hai Precision, blamed for mass suicides at its factories in China making iPhones for US technology giant, Apple.
At the time, one of the five parliamentary pension scheme trustees, Labour MSP, Pauline McNeill, said that she would raise her concerns about the investments at the next trustee meeting on 11 December.
The minutes of that meeting have now been released after a freedom of information request by The Ferret. They record that Andrew Maclaren from the government’s actuary department led “a discussion about a review of the scheme’s investment strategy”.
The minutes add: “To facilitate a further discussion Andrew was asked to provide further information about options for incorporating a higher ethical, environmental, social or governance approach into the investment strategy.”
The Scottish Parliament’s head of information governance, Claire Turnbull, also said that from now on the minutes of all the pension trustee meetings would be published on the parliament’s website.
MSPs and campaigners who had criticised the investments welcomed news of the review. “I’m pleased that the parliamentary authorities appear to be moving toward introducing an ethical investment policy,” said Green MSP, John Finnie.
“It is simply unacceptable that the MSP pension pot continues to support a host of unscrupulous organisations. This is a practice that must end.”
Labour MSP, Neil Findlay, was also pleased at the parliament’s move. Holyrood should be an “exemplar of good practice,” he argued.
Andrew Smith of Campaign Against Arms Trade had criticised the fund’s investment in two arms companies. One, Ultra Electronics, makes the US military’s lethal Predator and Reaper drones and the other, Meggitt, has provided data systems for the Israeli military’s Apache gunships and gyroscope devices for Saudi helicopters.
This is definitely welcome, and we hope that it is a serious and sincere exercise that leads to change. Andrew Smith, Campaign Against Arms Trade
“This is definitely welcome, and we hope that it is a serious and sincere exercise that leads to change,” said Smith.
“These investments should never have been allowed in the first place. The Scottish Parliament should seize the opportunity to send a positive message and set a powerful precedent by ending its support for damaging and destructive industries like the arms trade.”
Holyrood’s investments in the defence company, Rolls-Royce, also came under fire. Unlike the well-known car manufacturer of the same name, the firm makes aircraft engines and the reactors which run Britain’s nuclear submarines, including those armed with Trident nuclear missiles based at Faslane on the Clyde.
Anti-nuclear campaigners want MSPs to stop funding Rolls-Royce. “The fund’s strategy must exclude companies that undertake nuclear weapons-related activities, like Rolls-Royce,” said Dr Michael Orgel from Don’t Bank on the Bomb Scotland.
“It’s immoral to profit from the production of weapons of mass destruction and investments in these companies are helping to fuel a dangerous new nuclear arms race. Moreover the investment in Rolls-Royce represents a financial risk to the fund’s members.”
Orgel added: “The nuclear ban treaty is set to enter into force within a year and companies that continue to work on activities that are prohibited by international law will risk damage to their reputation and their business, making them a poor investment choice.”
We need our parliamentarians to have the courage to divest from the companies most responsible for the climate crisis. Ric Lander, Friends of the Earth Scotland
We also reported that the pension fund helped four fossil fuel companies blamed for climate pollution. They were coal miners, BHP Billiton and Rio Tinto, oil company, Royal Dutch Shell and Reliance Industries, an Indian company with a large coal and gas subsidiary.
According to Friends of the Earth Scotland, the aggressive exploitation of fossil fuels was causing extreme weather events that threatened the lives of millions. “Scotland prides itself as being a world leader on climate action,” said the environmental group’s divestment campaigner, Ric Lander.
“For this to be true we need our parliamentarians to have the courage to divest from the companies most responsible for the climate crisis.”
A Scottish Parliament spokesperson said: “Trustees are reviewing the scheme investment strategy, as is best practice after a triennial valuation.
“To help with this review, they have requested more information about options for incorporating a higher ethical, environmental, social or governance approach. A range of views and considerations will be taken into account before a final decision is reached.
“The scheme investment strategy has always included a requirement for the investment fund manager to consider ethical, social and governance issues when investing the scheme assets.”
Minutes of pension fund meeting and letter from Scottish Parliament
This story was updated at 20.00 on 30 January 2019 to include comments from Friends of the Earth Scotland, and at 11.39 on 31 January 2019 to include comments from the Scottish Parliament.