Council invests £11m in tobacco firms

 

The money is invested as part of its £350m pension fund with ASH Wales calling it a scandal after it was revealed a total of £116 million was invested as a whole by Welsh councils into tobacco.

 

The anti-smoking agency says the investments represent double standards from the councils who are signed up to a Welsh Government mandate to reduce smoking and smoking-related deaths in Wales.

 

Elen de Lacy, chief executive of ASH Wales, said: “It is a scandal that local authorities are allowed to invest employees’ money in tobacco companies when evidence shows their products are killing more than 5,000 people each year in Wales.

 

“It is also baffling that councils feel this sort of investment is appropriate when they are signed up to reducing the harm caused by smoking in their tobacco action plans and partnerships with local tobacco action groups.

 

“As pooled investment managers are now able to tailor investment funds away from the tobacco industry into ethical funds, we believe that Welsh local authorities should follow suit and make all of their pension funds transparent and tobacco-free.”

 

Powys invests its £11m in 16 separate companies, including Philip Morris, British American Tobacco and Gudang Garem, which is the largest producer of clove cigarettes – a blend of tobacco, cloves and other spices – in Indonesia and Taiwan.

 

But Geoff Petty, Powys County Council’s strategic director for finance and infrastructure, explained: “We invest part of our £350m pension fund in shares. Our fund managers operate in all the main stock markets globally. This means that the investment managers often hold shares in the companies that trade in those markets, such as the FTSE100.

 

“The fund does not tend to buy shares directly. We invest in pooled funds where a fund manager managers a pool of investments for a range of investors.

 

“In these circumstances, it is not appropriate to constrain an investment manager from investing in a particular share for social, environmental or ethical consideration.

 

“The primary duty of the fund is to its members and its pensioners to seek the best returns commensurate with risk.”

 

A quarter of adults in Wales currently smokes but the Welsh Government wants to cut that to just 16% by 2020 – a similar drop to that achieved in California.

 

As part of the Welsh Government’s tobacco control action plan, councils have a duty to reduce the harm from tobacco. This has seen them adopt smoke-free policies, extending to external spaces owned by the council and hosting tobacco action groups.