Published: 00:01, 09 November 2017 |
County finance chiefs have defended a multi-million pound pension fund investment in fossil fuels in the face of criticism from environmental groups.
Figures released today show Kent County Council’s pension fund has investments totalling £267 million in fossil fuel companies - representing just under 6% of its total fund.
Campaign groups say councils should reconsider their investment policy as fossil fuels contribute to climate change caused by the extraction of coal, oil and gas.
Kent’s investment is marginally higher than Essex county council, East Sussex and Hampshire.
KCC said its primary responsibility was to ensure a good return for the thousands of members in its pension fund.
But its stance was described as “completely unacceptable” by KCC Green county councillor Martin Whybrow.
“These sorts of investments run directly contrary to KCC's own policies and responsibilities, including its Kent Environment Strategy and public health remit.
“It is unacceptable to hide behind 'fiduciary responsibility' - in other words, having to make the maximum return on investments.
"Investments in fossil fuel companies are ever higher risk.
"These companies' business models are based on a finite and rapidly diminishing resource that countries across the globe have committed to move away from,” he said.
But Cllr John Simmonds, the authority’s cabinet member for finance, said: “Fossil fuel company shares have been among the best investment by way of return but they also represents a small proportion of the overall investments –3% – made by KCC’s pension fund.
“We continue to meet our responsibility of ensuring that investments are legal and ethical, while also providing the best level of return possible to avoid any pension shortfall needing to be made up by Kent’s council taxpayers.”
He added the fund was managed independently from the council by external investment managers responsible for getting the best return for organisations and individuals.
“Beyond our environmental, social and governance policy, pensions are overseen by the Superannuation Fund Committee consisting of county councillors, representatives of other Kent councils, trade unions, employees and pensioners,” he said.
However, several councils have chosen not to invest in fossil fuel companies and instead focus on green energy.
Sarah Shoraka of Campaign group Platform, which compiled the data, said: “By continuing to heavily invest in companies like BP and Shell, local authorities are risking the future of our pensions and our climate.
"Council pension funds have an opportunity to invest instead in things communities really need: affordable housing, public transport, and publicly owned renewable energy.
"Councils must divest to secure pensions and invest in our future.”
The Kent Pension Fund has around 500 different employers in it and 110,000 scheme members. It has investments of more than £4 billion.
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