Council pension funds 'should invest ethically'

Simon Read
Friday 27 January 2012 20:00 EST
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Local authorities have been urged to scrap investments in tobacco firms after an investigation by The Independent revealed that their pension funds have an estimated £2bn stake in firms such as Imperial and British American Tobacco.

Critics say supporting the tobacco giants is a conflict of interest given that local councils are taking over responsibility for public health next year.

Martin Drockrell from the anti-smoking group Ash said: "Many councils have more money tied up in tobacco firms than they will be spending on protecting children and helping smokers to quit."

Pension funds have a duty to maximise returns for members, but that doesn't mean they have to invest in tobacco firms, said Mark Robertson of the research firm Eiris. "Companies involved in the production of tobacco account for a tiny percentage of the market capitalisation of the FTSE All World Developed Index, so it isn't a big ask for pension funds to exclude these business," he said.

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