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12
Nov
Council pension fund invests £20.5m in tobacco giants despite anti-smoking campaigns
This is the first in a series of articles on the ethics of where North Yorkshire Council invests its pension fund.
New data, obtained by the Stray Ferret through a freedom of information request, reveals that North Yorkshire Council continues to invest tens of millions of pounds in ethically dubious companies.
The North Yorkshire Pension Fund is a defined benefit pension scheme that provides retirement benefits to 103,000 people, including staff of North Yorkshire Council and City of York Council, as well as other public bodies.
A Stray Ferret investigation five years ago discovered the fund invests in controversial areas.
We can now reveal the fund's investment in two international tobacco companies remains high at £20.5 million.
It means the council is boosting the profitability of tobacco firms even though it is the public health authority and runs campaigns to stop people smoking.
Maximising pension fund returns is financially beneficial for former employees, but it raises ethical questions about whether a public sector pension fund should use workers' contributions to generate investment returns from an industry whose products cause significant harm to public health.
Government guidelines allow council pension fund managers to consider ethical, social and environmental concerns when chossing how to invest.
£20.5 million in tobacco despite anti-smoking campaign
The fund invests heavily in two of the world’s largest tobacco companies: Philip Morris (£16.8m) and British American Tobacco (£3.7m in shares plus bonds).
Yet at the same time the council spends public money on services that encourage people to stop smoking, such as Living Well Smokefree.
The government awarded North Yorkshire Council £642,000 in 2025/26 to expand its anti-smoking initiatives.
Last year the council published a report which said “smoking remains the biggest preventable killer in the UK, contributing to a wide range of health conditions and costing North Yorkshire an estimated £400 million per year on health, social care and other costs”.
Alex Crumbie, a researcher at Ethical Consumer, a not-for-profit group that assesses ethical practices, said:
When we invest in a company we are giving it our vote of approval. Investing in tobacco companies, for example, helps their long term profitability and survival, so it is at odds with reducing smoking rates among the population.
Everyone wants to earn a good pension when they retire, but most don't want their savings to come at the expense of people and planet. It is very possible to invest in more ethical companies and still make a good return, so North Yorkshire Council should review its pension fund and stop investing in companies and sectors that are inherently harmful.
Responsible investment?
North Yorkshire Council's investments are managed by Border to Coast, which is one of the UK's largest pension investment organisations.
Based in Leeds, it manages more £55 billion of assets on behalf of public bodies.
It has a responsible investment policy, which doesn't exclude tobacco.
We asked Councillor Angus Thompson, a Conservative who represents North Richmondshire on North Yorkshire Council, to comment on the issue of responsible investment but he did not reply.
Cllr Matt Walker, a Liberal Democrat who represents Knaresborough West and an NHS manager, urged the council to "live its values" and divest from its holdings in tobacco companies when we wrote about the subject five years ago.
However, Cllr Walker said a new workplace conflicts of interest policy prevented him from commenting this time.
When we approached the council, a spokesperon asked us to contact Border to Coast because it was "responsible for making all investment decisions on behalf of North Yorkshire Pension Fund".
A Border to Coast spokesperson said:
As a responsible investor, Border to Coast considers a range of factors that could affect the long-term value of investments, including sustainability-related risks and opportunities where these are financially significant. Our approach is to protect and enhance long-term value, helping to fund pension payments for local government pension scheme members many years into the future, while supporting positive change at the companies in which we invest.
We use our position as an investor to encourage improvements through dialogue with company management and voting at shareholder meetings. This can cover issues such as climate transition planning, worker health and safety, governance standards and other business practices that may affect long-term performance.
Few would deny retired council workers a good pension. But ethical questions about whether that should involve boosting the coffers of tobacco firms continue to linger.
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