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15
Nov
Council pension fund invests in 'ethically questionable' military companies
This is the third and final part of our series exploring the ethics of the council’s pension fund. Our previous articles revealed that over £20 million is invested in tobacco companies and £32 million in fossil fuels.
North Yorkshire Pension Fund invests in hundreds of companies.
The Stray Ferret acquired the full list following a freedom of information request.
After previously highlighting the fund's investments in companies involved in tobacco and fossil fuels, this time we look at some other ethically questionale fund beneficiaries.
Government guidelines allow council pension fund managers to consider ethical, social and environmental concerns when choosing how to invest — but fund managers also have an eye on maximising profit.
Here are some of the more controversial discoveries we made.
£38m in companies linked to China’s military
The Pentagon has a watchlist of companies it believes are linked to the Chinese military. Although it doesn’t apply full sanctions on the companies, it does operate a ‘warning to global investors’. There is also talk of these companies being removed from the US stock exchange.
The pension fund invests £19.7m and £13.1m respectively in Tencent, a Chinese technology conglomerate and CATL, the world's largest electric vehicle and energy storage battery manufacturer that has been the focus of forced labour claims that it rejects.
The fund also has £4.7 million invested in Alibaba, the ‘Amazon of China’, which is on the watchlist, although the company disputes ties to the Chinese military.
North Yorkshire Council in Harrogate.
Other investments
Other industries that could be considered unethical make up a significant proportion of investments.
Weapons, policing and surveillance companies, including US firm Axon, which makes Tasers, and controversial AI giant Palantir, have £32 million invested in them.
Over £5.3 million is invested in gambling companies, nearly £20 million in alcohol production companies and about £9 million in Roblox, the children’s gaming platform that faces child-safety lawsuits in the US.
Does it matter?
The council has a Responsible Investment Policy, outlining how best to integrate environmental, social and governance factors into traditional financial analysis to ensure a balance of both responsible and productive investing.
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, and taxpayer money, to invest in morally questionable companies.
When we approached the council, a spokesperson 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:
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.
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