Scottish Borders Council Pension Fund has over 11,000 members, including employees of Scottish Borders Council, Borders College, Scottish Borders Housing Association and several other public and charitable organisations in the area.[1] The fund holds £712 million in assets.
The response to our freedom of information request shows that Scottish Borders Council Pension Fund held no investments in nuclear weapons producers as at September 2020. The fund previously held shares in Rolls Royce until at least 2019.[2]
Policy
Scottish Borders Council Pension Fund’s statement on responsible investment suggests that the fund adopts a broader interpretation of fiduciary duty than some other Scottish local authority pension funds. The statement says that as well as seeking to enhance long-term returns on its investments, the fund seeks to “ensure that [it] minimises any harm to the environment and society”.[3]
The fund requires investment managers to uphold eight overarching principles which are set out in the statement under the headings “environment”, “social responsibility” and “corporate governance”. Principle 2.2.4, under the social responsibility heading, states:
“When companies are involved in certain controversial activities, we may refrain from investment in those companies. For example, we may decide to exclude companies which are involved in the production of controversial weapons.”
Councillor David Parker, the Chair of Scottish Borders Council pensions committee and a member of the Scottish Local Government Pension Scheme’s advisory board, confirmed that this policy covers nuclear weapons. Councillor Parker told us that the committee, in fact, instructs its external fund managers to try to avoid shareholdings in the arms industry altogether as these investments are considered to be unethical. If the committee retrospectively becomes aware of a holding in that area, it may instruct the fund manager to disinvest.
We note, however, that the fund still own shares in Meggitt Plc, a company that gets about a third of its sales from military equipment.
While principle 2.2.4 policy does not comprehensively prohibit the fund from owning shares in nuclear weapons companies, it is commendable that Scottish Borders Council Pension Fund has recognised the harmful effects of controversial weapons. The policy is also notable for the fact that it is the only reference to controversial weapons that we found in the policy documents of all 11 Scottish local authority pension funds.
Action
If you live in the Scottish Borders and you think that the fund’s policy should be strengthened to comprehensively preclude investment in nuclear weapons companies, please contact your local councillors: https://nukedivestmentscotland.org/local-authority-divestment-resolutions/
NOTES
[1] 2020 unaudited accounts available here: https://www.scottishborderscouncilpensionfund.org/scottish-borders-council-pension-fund/about-us/forms-and-publications/.
[2] https://nukedivestmentscotland.org/wp-content/uploads/2018/09/working-to-eliminate-nuclear-weapons-through-divestment-a-guide-for-scotland1.pdf.
[3] https://scottishborderscouncilpensionfund.org/media/4372/181130-statement-of-responsible-investment-approved.pdf.
Don't Bank on the Bomb Scotland 