An environmentalist has told councillors the North Yorkshire Pension Fund should “immediately offload” its investments in fossil fuel firms.

The fund receives contributions from staff at 160 firms, plus past and present public sector workers, and is worth £4.9bn.

The Stray Ferret revealed in January that the fund holds over £70m in climate-damaging companies, such as Shell and BP.

Richard Tassell, of Fossil Free North Yorkshire, told a meeting of the fund’s committee at County Hall in Northallerton that the world has “just 30 months” to begin radical changes.

Mr Tassell, a former staff member of both York and North Yorkshire authorities, said although the fund was working to invest more in renewable energy firms, this was “an entirely inadequate response to the scale of the crisis we are facing”.

He told the committee:

“We are asking that the council actively and urgently consider divesting from fossil fuel investments currently held by our pension fund and seek reinvestments in renewable projects.

“The Ukrainian invasion by Russia has highlighted the precarious nature of western countries’ energy supplies and when set against the developments in renewables over the past five years to a point where this technology is cheaper than coal, gas and oil. We must move away from those fuels at pace.”

He called for the committee to set time-specific targets to end fossil fuel investments and consult with all the pension fund’s members.

Read more: 

• Exclusive: Council invests £70m into climate-damaging fossil fuel companies
• Exclusive: Council invests £15m in arms firms linked to deadly Yemen War

A spokesman for the committee did not respond to either of the calls, but said getting rid of investments in fossil fuel firms immediately may exacerbate climate change.

The spokesman told the meeting the fund had been reducing its fossil fuel-related holdings in recent years and they now stood at less than 1%, which was “very low compared with just about every other local authority fund”.

He added:

“We have taken a view that we favour engagement over divestment from oil and gas companies. The reason for this is that we believe through engagement we can influence the direction of travel of these companies towards a low carbon economy.

“We also believe that if we were to sell the shares they would be more likely to be acquired by investors that would not have those responsible investment beliefs at their heart.”

He said the committee had been “quite ambitious” in terms of putting more money into low carbon investments and renewable investments.

Councillor John Weighell, the committee’s chairman, told Mr Tassell:

“I think the main difference between us may be not of the end result, but timing. We will get to the position that you want us to, but not as quickly as you would want us to.”

Managers of a pension fund run for North Yorkshire and York’s biggest employers as well as for a large number of staff working for a spectrum of private firms are struggling to offload indirect holdings in Russia, it has emerged.

A meeting of the North Yorkshire Pension Fund Committee heard it had some £4.9 billion of assets at the end of the year and liabilities of only £3.8 billion, leaving a surplus of over £1 billion.

Members were told that although the pension fund was “very healthy”, with a 129% funding level, about 0.1% of the fund related to Russian “indirect holdings through our managers”.

Council officers told the meeting:

“We are working with those pension fund managers and our advisors on the most appropriate course of action to take, but options are quite limited at the moment.

“One issue at the moment is that the Russian stock exchange is actually closed at the moment.”

The meeting also saw the pension fund, whose members range from teachers to security guards, heralded for efforts to ensure its investments help to tackle climate change.

Read more: 

• City council to make formal complaint about policing in Ripon
• Exclusive: Council invests £70m into climate-damaging fossil fuel companies

Council officers said while investing in commodities such as oil, energy and metals, during the current period of high inflation was profitable, over the long-term such investments would not be pursued.

They said while the North Yorkshire Pension Fund has its own responsible investment policy that was reviewed annually, the authority had been working with one of its fund managers Border to Coast, one of the UK’s largest pension pools, on the development of its climate change policies.

Climate change

York councillor Christian Vassie welcomed the policy change, saying the pension fund clearly recognised the role that such pension funds had in the transition to a low carbon economy in the future.

He said while it was vital the fund continued to make money for its members, he was hopeful North Yorkshire Pension Fund would press home the importance of climate change in investment decisions.

Cllr Vassie said balancing responsibilities to ensure that people have a secure pension when they retire while ensuring that we all have somewhere to retire to.

He added: 

“This pension fund has a clear leadership role to move Border to Coast forward. There are a number of instances where they are showing less commitment than some would like.”

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.

You can click on the links to read our previous reports on how NYCC’s pension fund invests in fossil fuel companies and arms companies.

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.

He said:

“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.

Cllr Caroline Dickinson and LivingWell Smokefree team members.

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.

He added:

“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.

It says:

“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 thomas@thestrayferret.co.uk 

A North Yorkshire County Council pension fund invests £15m in arms companies that have built weapons for the deadly Saudi Arabia-led bombing campaign in Yemen.

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 council’s pension fund is now facing renewed calls to divest from arms firms. However, its own responsible investment policy, last updated in July 2021, clearly states that it will not implement an “exclusionary policy” against companies that are deemed by some to be questionable.

It says:

“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”.

Ethical questions for council

The fund has an investment worth £11m in the UK’s largest arms manufacturer BAE Systems.

Company reports analysed by the Campaign Against Arms Trade (CAAT) found BAE Systems, via the UK government, has sold at least £15bn worth of arms and services to the Saudi military since the Yemen conflict began in 2015.

According to UNICEF, over 10,000 children in Yemen have been killed in the conflict, which is between a Saudi-backed Sunni group and Shia Muslims.

Professor Anna Stavrianakis is an expert on the global arms trade and is a Professor of International Relations at the University of Sussex. She told the Stray Ferret the pension fund’s investment in BAE Systems raises ethical questions for NYCC.

She said:

“The basic ethical premise of investment is that you invest now to secure a better future for yourself. If you do that by investing funds in a company that in an extremely direct way has contributed to the deaths of other people, it is not that much of a stretch to say there’s an ethical issue there.

“If I was a council employee I would be asking where is my money being invested, and at whose expense is my future being secured? They can be painful questions to answer.”

‘Death and destruction’

North Yorkshire Pension Fund also holds £3.7m in Raytheon Technologies, an American defence company that manufacturers the controversial Paveway bomb.

Fragments of the bomb were found following a 2019 Saudi-led air strike in Yemen that killed six civilians, including three children.

A Paveway bomb being dropped. Credit – Raytheon

In 2019, the European Center for Constitutional and Human Rights (ECCHR) submitted a 300-page document accusing European arms executives at firms, including BAE and Raytheon, of “aiding and abetting” alleged war crimes in Yemen by the Saudi-led coalition.

Kirsten Bayes from the Campaign Against Arms Trade, called on North Yorkshire County Council to reconsider its pension fund’s investments into arms companies.

As well as BAE Systems and Raytheon, the pension fund also invests £7.3m in Safran and £6.9m in Rolls Royce, which are both major manufacturers of military equipment.

Ms Bayes said:

“Arms companies make their money from death and destruction. Council tax payers and pensioners in North Yorkshire will be shocked to learn that their funds are invested so heavily in such a violent industry.

“We would call on the trustees of the pension fund to reconsider their investments in weapons makers. Their money could instead be helping to create new, green jobs in the high growth industries of the future. That would be a better deal for everyone.”

Councillor defends the investment

Harrogate Borough Council Conservative councillor Jim Clark has sat on the Pension Fund’s committee of councillors since 2001 after a career in finance. He represents all the district councils in North Yorkshire.

He defended the investment in BAE Systems when asked by the Stray Ferret. He said the £11m holding represents a “very, very small” part of the fund’s total investments and that the fund’s main responsibility is to maximise its value, although he said “various people have different views on that”.

Cllr Jim Clark

Cllr Clark believes by remaining as an investor in companies that are deemed by some to be controversial, it can use its power to influence decision-making.

He said:

“Theres no point saying ‘just sell the shares’. If you have no shares you have no way of influencing decisions made, people tend to forget that when they make comments that haven’t been properly thought through.

“Successful companies will always listen to their shareholders. It’s very important that they do.”

Cllr Clark was unable to provide evidence of how the North Yorkshire Pension Fund has influenced decision-making at BAE Systems.

BAE Systems and council respond

The Stray Ferret approached both BAE Systems and Raytheon for comment.

A BAE Systems spokesperson said:

“We provide defence equipment, training and support under government to government agreements between the UK and the Kingdom of Saudi Arabia.‎ We comply with all relevant export control laws and regulations in the countries in which we operate and our activities are subject to UK government approval and oversight.”

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”.

In the final part of our investigation into the council’s pension fund, we reveal it holds over £20m in cancer-causing tobacco companies despite the council being in charge of public health.