Tobacco, fossil fuels and fracking: Council pension scheme criticised

Pam Mills

The independently operated Kent Pension Fund benefits all County Hall [KCC] employees from councillors to teachers.

The Times has previously reported how fund managers invested £116million in tobacco [while carrying out a £1.2million stop-smoking campaign] and £174million in fossil fuels.

New data, released last week by environmental pressure group Platform, shows the authority’s plan additionally contains a £165million investment in firms who have engaged in hydraulic fracturing [fracking].

Fracking is a method of extracting natural gas, and has attracted criticism for its environmental impact and possible link to water contamination.

According to a 2014 Guardian report, Tunbridge Wells is within a south east zone where gas companies are drilling under homes.

Big name gas brands Shell, BP, EOG Resources, BHP Billiton and Apache are among those KCC’s pension fund managers invested in.

The companies derive most of their income from activities with nothing to do with fracking, but according to Platform, have all engaged at some points in the contested practise – which has led to KCC being criticised for their choice of investments.

Green Party county councillor Martin Whybrow, a critic of the Conservative-led authority’s pension fund, said: “I have campaigned since I was elected for divestment.

“Neither the pension fund nor the council, through its treasury management strategy, should hold shares in businesses that are directly contrary to the council’s policies.

“Fracking is totally incompatible with KCC’s Kent Environment Strategy and the UK government’s climate change commitments under the Paris agreement, as is exploitation of all other forms of fossil fuel.

“Not only should they be jettisoned for ethical and environmental reasons, there is also no sound financial reason to hold them. The same applies to other unethical stock, such as KCC’s shares in the world’s four largest tobacco companies.”

Platform said councils across the country were making investments like these, despite support for fracking being ‘consistently low’.

Cllr Peter Oakford, KCC’s Cabinet member for Finance and representative for Tunbridge Wells North, said: “The council’s pension fund is managed independently of the council itself.

“External investment managers who have the responsibility to get the best return for organisations and individuals – including the pension holders and their families.

“All matters relating to the management of the fund are the responsibility of the Superannuation Fund Committee which has a responsibility to maximize investment returns for a given level of risk.

“The amount invested in the companies on this list is about 3 per cent of the £5.8billion invested in the fund.

“The public will be familiar with the names of the bigger companies on this list and it is clear that they derive most of their revenue from activities that have nothing to do with fracking.

“In fact, none of the companies on the list of investments is among the UK’s top fracking companies.”

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