A North Yorkshire County Council-controlled pension fund invests over £20m in two of the world’s largest tobacco companies, despite the council being in charge of public health and running its own quit smoking service.
The revelations come as part of a series of investigations by the Stray Ferret into controversial investments made by the North Yorkshire Pension Fund, which is controlled by the council.
The Stray Ferret obtained a full list of the companies the pension fund invests in through a freedom of information request.
The NHS estimates smoking kills more than 1,000 people every year in North Yorkshire but the council’s pension fund holds £12.4m worth of shares in British American Tobacco and £8.9m in Phillip Morris.
Matt Walker, an NHS manager from Knaresborough who is also a Liberal Democrat campaigner, told the Stray Ferret he has seen first-hand the damage smoking has had on people’s health, including his own grandparents.
“If I was lucky enough to have a private pension then I certainly wouldn’t want it invested in tobacco companies. I don’t smoke for a good reason; I saw the painful premature death of my grandparents who both died within days of each other from smoking-related diseases.
“As someone who has worked in health locally for nearly two decades, I know that in North Yorkshire smoking continues to be the biggest preventable cause of ill health and early death.”
‘Live its values’
NYCC has a document called the North Yorkshire Tobacco Control Strategy for 2015-2025.
It says the council has a “proven record of success” in the provision of stop smoking services, with rates falling, in part thanks to its quit smoking service called Living Well Smokefree. The service is available to anyone aged from 12 and offers one-to-one help to quit.
The report says the county still has work to do, particularly with young people and those with mental health issues. It says:
“The impact of tobacco is felt most by the poorest in the county, not just on the smokers but also on their children and their communities. We must protect the health of future generations by ensuring smoking prevalence continues to fall.”
NHS manager Matt Walker called on the council to “live its values” and divest from its holdings in tobacco companies.
“The council also has smoking policies to protect the health and wellbeing of its staff. It’s important that any organisation lives its values. North Yorkshire County Council fails at the final hurdle as its pension fund holds over £20million in tobacco companies.”
‘Not an issue’
Harrogate Borough Council Conservative councillor Jim Clark has sat on the Pension Fund’s committee of councillors since 2001.
He told the Stray Ferret that he “doesn’t think there is an issue” with the council pension fund profiting from tobacco companies whilst at the same time being in charge of public health.
Cllr Clark pointed to the way tobacco giants such as British American Tobacco have diversified in recent years.
The companies now sell, what they market as, healthier alternatives to cigarettes, such as vapes and oral nicotine products.
Philip Morris’ chief executive Jacek Olczak said he hopes half of the company’s revenue will come from these smoke-free products by 2025.
Cllr Clark said:
“We know there’s a health issue with tobacco but some of these companies have other activities. It’s very difficult to get a company that deals in one activity now.
“We must remember, if we have shares in these companies, we can help to inform the debate.”
Responsible investment policy
As we have reported this week, the pension fund investments are managed by a private company called Border To Coast.
Government guidelines say fund managers can take ethical, social or environmental concerns into account when it invests, providing the fund’s finances do not suffer.
However, North Yorkshire’s responsible investment policy, last updated in July 2021, states that it will not implement an “exclusionary policy” against companies for ethical or social reasons.
“Whilst the Fund recognises that there is the potential for investment in certain sectors to cause harm, it will not implement an exclusionary policy against investment in any particular sector or company purely based on social, ethical or environmental reasons”.
Divesting from tobacco
The Greater Manchester Pension Fund, currently the largest local authority fund in the UK, divested from tobacco stocks in 2014.
Deborah Arnott, chief executive of the health charity ASH (Action on Smoking and Health) told the Stray Ferret that North Yorkshire should follow suit.
Ms Arnott said:
“Local authority pension funds have a legal duty to get the best deal for their pensioners, but that doesn’t mean they have to invest in tobacco companies.
“Greater Manchester, the largest fund in the Local Government Pension Scheme disinvested from tobacco stocks years ago, on the basis that the tobacco sector is relatively small as a proportion of world equity markets and the Fund’s investment managers’ views were that such exclusion was unlikely to have a material adverse impact on returns.
“What’s true for Greater Manchester’s pension fund is equally true for North Yorkshire.”
Gary Fielding, treasurer of North Yorkshire Pension Fund for North Yorkshire County Council, said:
“The pension fund needs to get the balance right on responsible investment and ensuring funds are available to pay pensions without further call on local taxpayers
“Rather than divesting from companies, the fund believes active engagement gives it, in collaboration with other pension funds, greater influence in effecting change within companies.”
Do you pay into the North Yorkshire Pension Fund and have an opinion on our investigation? Contact [email protected]