Friday, 2 September 2011

Cornwall Council and ethical investments

Today's Western Morning News carries a story about campaigners against the arms trade urging Cornwall Council to pull out of its investments in BAe Systems. This story is along the lines of my question to full council next Tuesday which is about council investments in tobacco firms.

People will have different views about the appropriateness of the local authority investing in different types of companies. To me, the investments in tobacco firms are among the worst because one of the jobs of the council is to persuade people to stop smoking as part of the public health remit.

In response to questioning, Cornwall Council has said:

"The overriding concern of the council's pension fund is to provide a sound financial return for thousands of people reliant on the pension in Cornwall. The council aims to keep a balanced portfolio of investments and has a publicly available Statement of Investment Principles which is rigidly adhered to. A local authority pension fund cannot, however, decide unilaterally not to invest in areas such as the arms industry if doing so would impact on the overall investment return achieved."

Of course the council has a duty to get a good return for its investments. But this cannot, in my view, be its only consideration. When I worked in the private sector and had a personal pension I was given the option of an ethical investment strategy and a number of options within that based on what my personal ethics thought acceptable or not. Surely the same options are available for local authorities?

And what about those companies which come into day to day contact with the council or bid for contracts with it. Recently Domino's Pizza and Morrisons have been applying for planning permissions and Serco are regular bidders for council contracts. All are companies in which the authority holds shares.

Cornwall Council's pension investments are made for the benefit of its staff - current, former and future. These staff deserve to get a decent return, but also the chance to have a say about the sort of companies they want their money invested in.

My question on Tuesday is about the specific conflict between the council's investments and our public health role. But I hope that our pensions committee will act swiftly to review the whole range of investments and come up with an ethical strategy slightly more community aware than the current Gordon Gecko viewpoint.

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