Investments

This page is a collection of information from the ESCC Pension Fund itself as well as from newspapers, council meetings, political parties and the Campaign Against the Arms Trade.

To see a detailed breakdown of the Pension Fund’s current investments, see this spreadsheet for July 2015 (for the older investment details, this FOI request page on the website WhatDoTheyKnow  has the detailed excel sheet for 31 August 2012). Find more information about the ESCC Pension Fund on their official website as well as on this council website and on this one.

Several FOI requests and newspaper articles over the years have shown the extent of its investment in tobacco and arms corporations. (see below)

This page also shows that many different people and organisations have been campaigning for the ESCC Pension Fund to change its investment practices to seriously take into account environmental and social factors. So far, very little progress has been made on the ESCC’s ethical investment practices, even though many have raised their concerns. This needs to change.

East Sussex Pension Fund Report and Accounts 2008/09 – “The Panel has considered the issues surrounding socially responsible investment and has adopted an ‘Active Shareholder Approach’ to encourage companies to adopt best ethical and environmental principles without jeopardizing the investment performance of the Fund. When selecting investments for purchase, retention or sale, Fund Managers are able to invest in all companies, subject to their specific restrictions set out in the Fund’s Policy Guidelines in order to achieve their performance targets. However they have been encouraged to engage in constructive dialogue on behalf of the Fund and to use their influence to encourage companies to adopt best practice in all key areas of business. The key areas are:

– Corporate governance
– Employment standards
– Human rights
– Environmental standards”

* Worrying figures emerge as Sussex workers strike – 30th November 2011 – The Argus – “The East Sussex Pension Fund, which currently has more than 21,000 active members from councils across the county, is valued at £1,867 million.”

* Anger over East Sussex Council’s ‘pension fund bank’ – Richard Gurner – The Argus – 18th May 2009

* Local authorities: South East – 2007 CAAT figures – “Details of known local authority shareholdings in the major European and US arms companies are listed below.”

East Sussex Pension Fund

Known shareholdings in identified arms companies:

1. Lockheed Martin £0
2. Boeing £328,991
3. Northrop Grumman £0
4. BAE Systems £6,154,554
5. Raytheon £275,809
6. General Dynamics £171,686
7. EADS £0
8. L3 Communications £0
9. Thales £0
10. Halliburton £0
11. Finmeccanica £2,929,573
17. Rolls-Royce £0
27. QinetiQ £0
40. VT £449,161
55. Cobham £931,307
66. Meggitt £0
79. Ultra Electronics £11,241,081

Total assets: £1,664 million
Total arms company holdings as % of assets: 0.7

* East Sussex Pension Fund arms investments – CAAT – 2006

East Sussex Pension Fund (108)
All Shareholdings are in £ and refer to 31 December 2005

UK arms company shareholdings

BAE Systems 1,973,648
Rolls Royce 5,745,048
Smiths 1,851,420
VT Group 1,249,416
Cobham 1,212,434
Total 12,031,966

Other European arms company shareholdings

EADS 341,920
Thales 0
Finmeccanica 0
Total 341,920

US arms company shareholdings

Lockheed Martin 0
Boeing 253,670
Northrop Grumman 441,174
Raytheon 0
General Dynamics 0
Honeywell 88,962
Halliburton 64,965
Total 848,771

* Letter: Up in arms over pension fund investment story – Glenn Williams – 13 February 2006 – As Councillor Brian Fitch said in in an article in The Argus (January 17) condemning the University of Brighton for the same investment a few weeks ago: “Brighton and Hove is a Peace Messenger city and its public bodies should not be getting involved in the arms trade”.

“Now two Brighton and Hove Councillors – Coun Hazelgrove and Coun Drake – are on the investment panel of this pension company and they should be strongly encouraged by their fellow councillors to use their influence on the board to disinvest from arms companies.

“The fact Brighton and Hove City Council recently passed a motion endorsing the Peace Messenger message – despite Councllor Bodfish limiting any embarrassment caused by mention of our own local bomb makers EDO/MBM – makes this disinvestment a matter of principle for our council.

“As for investment in tobacco, my own father never got to see his pension, after dying of a smoking-related illness at the age of 56.

“I’m sure many others whose pensions are or will be supported by this disgusting industry have been similarly robbed of loved-ones or will be in the future.

“It is deeply and sadly ironic many council employees, once retired, are growing old on the proceeds of arms sales and tobacco. Growing old is not something many victims of either of these products are able to do.”

* Pension investments are criticised – Kate Morrison – The Argus – 8 February 2006 – “In 2003 the fund had 46,800 shares in BAE – today it has 653,300. The arms manufacturer controversially sold Hawk aircraft to Indonesia and has done business with Saddam Hussein and ex-Chilean dictator Augusto Pinochet Meanwhile British American Tobacco makes about 900 billion cigarettes a year, controlling 16 per cent of the global market.

“The East Sussex fund is one of the largest in England and Wales and its 50 members include East Sussex County Council, Brighton and Hove City Council, the University of Brighton, all five district and borough councils in East Sussex, and some schools and colleges.

(…)

“A spokesman for East Sussex County Council said: “The aim of the pension fund is to generate returns, within a reasonable level of risk, to help support the local government pension scheme liabilities falling on the individual employers in the fund and the consequent impact on the council taxpayer.”

“A spokeswoman for West Sussex County Council said fund managers are asked to consider the effects of social, environmental and ethical issues but their primary objective is the fund’s long-term return.”

* Clean Investment Campaign Update – March 2005 – A brief round up of news for CAAT supporters working on the Clean Investment Campaign – according to this ESCC Pension fund is one of the “local authorities listed in last year’s newsletter which had indicated both that they have an ethically managed pension fund and that they hold shares in some of the arms companies highlighted by CAAT.”

* Local Authorities – shares held – CAAT 2005

BAE Systems 46800
Rolls Royce 838686
GKN 0
Smiths Group 109200
Cobham 30423
VT Group 0

* CAAT campaign launch exposes arms trade shareholders and unethical ‘ethical investment policies’ – CAAT – 6th April 2004 – “The campaign also highlights a disturbing trend: many investors are presenting themselves as having an ethical investment policy whilst still holding large numbers of shares in major arms exporters.

“This is clearly inconsistent and arises when investors adopt a policy of ‘engagement’ with the companies in which they hold shares,” explained Liz Morton of CAAT. “‘Engagement’ is where investors talk to companies, identify problem areas, try to persuade the companies to commit themselves to change and then monitor progress. The process has been successful in improving, for example, environmental practices, but engagement alone is hopeless where a company’s product is the fundamental problem. And producing and selling arms is a fundamental problem. The arms trade is not a normal, legitimate business and should not be treated as if it is. We hope that investors will soon come to realise the inadequacy of a policy that can result in a supposedly ethical fund holding shares in BAE Systems.”

“A large number of local authorities hold arms company shares whilst claiming to have ethical investment policies.”

BRIGHTON & HOVE CITY COUNCIL OVERVIEW AND SCRUTINY ORGANISATION COMMITTEE MINUTES – 19 JANUARY 2004:

53. REQUEST FOR SCRUTINY; PENSION FUND INVESTMENT

53.1 The Committee considered a request for scrutiny of policies concerning pension fund investment from Councillors Bill Randall and Keith Taylor together with a report of the Chief Finance Officer. (For copy see minute book.) OSOC noted that a similar request had been put forward by Councillor Pete West in 2002, when a scrutiny was not agreed.
53.2 Councillor Randall put forward reasons for his scrutiny request including concerns regarding pension investments in arms, tobacco, and countries with oppressive regimes, and monitoring of the council’s pension investments.
53.3 The Committee asked a number of questions and felt there was a general expectation that public bodies would apply high ethical standards in their pension investment policies. However there was uncertainty about the definition of ‘ethical,’ and the complexity of applying criteria to companies.
53.4 The Head of Law advised the meeting that there were other ways to take forward the item if Members did not wish to establish a scrutiny review at this stage.
53.5 RESOLVED – That the Committee invite one or both Brighton and Hove members serving on the East Sussex County Council Pension fund Investment Panel and officers to provide information to the next OSOC meeting.

* Clean Investment Campaign Update April 2004 – in their response to the questionnaire that CAAT sends to investors each year, the following Local Authorities have said that they have an ethically managed pension fund, even though they hold shares in some of the arms companies highlighted by CAAT.

East Sussex CC

“So there is clearly a big difference between what they and we understand by ethical investment. Reading their ‘Statements of Investment Principles’, it is clear that in quite a few cases, investment in arms companies could already be excluded if the will existed.”

* Call to curb unethical investments – The Argus – 21 June 2002 – “The Green Party said Brighton and Hove City Council’s commitment to peace, the environment and public health was being undermined because of investments in companies with dubious records.

“Greens want a scrutiny panel to investigate whether the authority’s four-year-old statement on ethics is working and whether it should be given more teeth.

“They acted after The Argus revealed the East Sussex pension Fund was investing in the tobacco and arms industries and companies with poor environmental and social records. ”

* Pension fund ethics row – The Argus – 8 May 2002 – “The Green Party has called for a council to quit membership of a pension fund unless its managers adopt a more ethically sound investment policy.

“Green councillor Pete West said the fund used by Brighton and Hove City Council should stop investing in the tobacco and arms industries and some multi-nationals.”

(..)

“He said Brighton and Hove could not, for example, honestly say it was a Peace Messenger City while its fund invested in arms manufacturers.”

* Green MEP wants inquiry into English councils’ unethical investments – 04 May 2002 – Caroline Lucas – Green Party statement – “When smoking costs the NHS £1.7 billion a year, why are Sussex councils investing £2.5 million in tobacco companies?

“Why are local authorities investing in the US military-industrial complex and other leading lights of the interntional arms trade?

“When Britain’s economic stability is threatened by globalisation, why are our local authorities investing in overseas companies instead of British companies?

“Why are we investing in companies like Rio Tinto, whose ethical and environmental records have been so rigorously questioned by trade union, human rights and environmental organisations?

“Why, when Britain and the world are already suffering catastrophic effects of climate change, are English local authorities investing in Exxon, a company subject to an international boycott over its role in persuading President Bush not to ratify the Kyoto Protocol on CO2 emissions?

Pension fund invests in arms, uranium and tobacco firms – Chris Baker – The Argus – May 2002 – “HALF of all smokers can expect to die early because of their habit, a mortality rate that costs the NHS about £1.7 billion every year in treatment costs. The death toll has prompted a strategy to cut the number of people who smoke involving all public bodies, from the Department of Health to local councils. Yet councils in Sussex are investing millions of pounds in big tobacco companies.

“The East Sussex Pension Fund has shares worth more than £2.5 million invested in Imperial Tobacco, British American Tobacco, Gallaher and Philip Morris. Robert Brynin, director of Hove based National Stop Smoking Centres, said: “I would not expect our local government organisations to be investing in unethical funds and clearly tobacco is an unethical investment by any standard. “I am sure the individual pensioners would not want their money to be going into tobacco companies. They would not be wanting to make a profit out of other people’s deaths.”

“The East Sussex Pension Fund, at about £1 billion, is one of the largest in England and Wales and invests in most of the familiar names in global big business. The fund’s members include East Sussex County Council, Brighton and Hove City Council, the University of Brighton and all five district and borough councils in East Sussex. In all, there are 50 members, among them colleges, such as Brighton, Hove and Sussex Sixth Form College and City College Brighton and Hove, more than a dozen town and parish councils, Brighton and Hove Citizens’ Advice Bureau, a handful of housing associations and public and voluntary sector organisations.

“The fund’s statement of socially responsible principles, which all pension funds must draw up, says the companies it invests in should be encouraged to pursue ethical policies, particularly on employment and environmental standards and human rights. Campaigners against the arms trade believe that should rule out investment in companies who supply weapons and military equipment to countries with questionable records on human rights.”

* Councils, take care with our cash – Ted Collict – letter to The Argus

“There are now more refugees in the world than at the end of the Second World War.

“Much of this is directly caused by the many horrendous conflicts around the world, fuelled by corruption, easy access to modern armaments and the selfish interests of large companies.

“For years, Unison has been trying to get East Sussex County Council and the other authorities to take responsibility for how invested money is used and profits are made.

“The elected members of the local authorities have shown little real commitment so the article is very welcome.

“We need to have balance sheets from companies not only showing money but also the social and environmental impacts of their activities.

“Local authorities are in a position to demand this and to change what is produced and done with the money invested in the name of the citizens of East Sussex and Brighton and Hove.

“You may find other pension providers, such as insurance companies, have an even worse investment record. -Ted Collict, East Sussex Pension Fund Staff Observer

* Review urged into pension controversy – The Argus – 3rd May 2002 – “Coun Fitch, a member of the ruling Cabinet, said: “I want to make sure the fund withdraws from areas such as tobacco and arms.

“I am calling on council representatives to lobby for a change in policy.”

“Ethical investment should be a major part of any pension fund and it is possible to get returns as good if not better than those in notorious companies.

“We should be steering clear of tobacco and arms companies and those which are exploiting parts of the third world.

“The city council uses the Co-Op Bank, which is a shining example of what can be done.

“It is extremely successful and has a totally ethical policy which is well publicised. It also has keen prices.”

“The report said that while councils in Sussex had led strategies to cut the number of people who smoke, authorities’ pension funds still invest millions of pounds in tobacco companies as well as in arms corporations.”

A question of ethics – The Argus – 2 May 2002 – “The East Sussex fund, like all others, has principles about investing in firms which pursue ethical policies and preserve the environment.

“Although smoking is not illegal, investing in tobacco companies is a direct contradiction of the health policies adopted by most, if not all, the organisations involved in the pension fund.

“They should make a stand against investing in tobacco companies as the issue is clear cut.”