Council backs call for ethical local government pension investment

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At this month’s full council meeting, councillors debated a motion tabled by Deputy Council Leader, Cllr. Jane Gebbie (Lab, Pyle, Kenfig Hill & Cefn Cribwr), concerning how local government pension funds are invested.

Council Motion: Ethical Local Government Pension Investment (Summary)

The full text of the motion is available here.

The Council notes that the Wales Pension Partnership (managed by Rhondda Cynon Taf) manages over £3 billion of investments on behalf of local government employees and retirees. However, this includes investments in fossil fuel companies, arms manufacturers and corporations accused of environmental and human rights violations.
Other public bodies have adopted responsible investment policies to move pension funds (divesting) away from harmful sectors.
While the Wales Pension Partnership has adopted a responsible investment policy, BCBC should write to the pension fund requesting greater transparency on its current investments. Also, to request that the fund excludes investments in companies that are involved in fossil fuels, human rights abuses, environmental destruction and deforestation – as well as arms manufacturers that violate international law.
BCBC supports sending the text of the motion to the Welsh Local Government Association, calling for a unified response across all of local government.
BCBC expresses concern over investments in companies involved in violence in Palestine, Myanmar and all territories under international sanction – now and in the future – calling for pension fund managers to align holdings with international law.

Cllr. Gebbie told councillors that decisions regarding pension investments shouldn’t be left solely to fund managers, as other councils have taken similar steps without compromising the performance of investments. It was also important to reflect on the values of Bridgend Council as a public body.

Some amendments to the original motion were agreed upon beforehand.

Cllr. Alex Ulberini Williams (Ind, Pencord & Penprysg) secured a strengthening of wording around international sanctions, ensuring it covers any future territories under sanction.

Cllr. Rhys Goode (Lab, Nantymoel) added amendments to ensure the guidance BCBC would like fund managers to follow is clear. He stated, on record, his opposition to BDS (Boycott, Disinvestment, Sanctions) measures targeted specifically against Israel.

However, this motion was more about responsible investment of pension funds more generally. Cllr. Goode believed it was right that local government pension funds remove themselves from sectors that have such an impact on issues like climate change.

Cllr. Ross Penhale Thomas (Ind, Maesteg West) hoped that the answer to the question around whether public pension funds should be invested ethically would be an overwhelming “yes”.

Several councillors expressed support for ethical and moral investment, as well as the council demonstrating its values. These include Cllr. Heidi Bennett (Lab, Pen-y-fai), Cllr. Simon Griffiths (Lab, Brackla East & Coychurch) and Cllr. Phil Jenkins (Ind, Maesteg East).

Motion "too broadly defined"; didn't attract unanimous support

While some parts of the motion sounded reasonable to Cllr. Owain Clatworthy (Reform, Pyle, Kenfig Hill & Cefn Cribwr), other bits lacked clarity. This made it difficult for councillors to make a “responsible decision” as the definitions are too broad. Without knowing specific companies this would apply to, he couldn’t support the motion.

Cllr. Sean Aspey (Ind, Porthcawl West Central) supported the motion in principle, but expressed similar concerns around definitions, particularly what “ethical” means. Some UK companies that pay the largest dividends are fossil fuel companies.

Meanwhile, companies like Rolls-Royce and BAE Systems make military jet engines and weapons and could be excluded under these definitions as potential “arms manufacturers”.

Along similar lines, Cllr. Jonathan Pratt (Con, Newton) couldn’t support the motion. Governments/states ultimately drop bombs; arms manufacturers don’t. The best way to address that is through international sanctions against governments.

A recorded vote was taken amongst councillors still present in the meeting; some had to withdraw after declaring prejudicial interests: