'Unethical' Lambeth Council invests in tobacco companies (From Your Local Guardian)

'Unethical' Lambeth Council invests in tobacco companies

7:30am Thursday 9th September 2010 in

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Millions of pounds were invested in tobacco companies by “unethical” Lambeth Council while it trumpeted an anti-smoking agenda.

Despite being a member of the borough’s tobacco alliance, which aims to reduce the harmful effect of smoking on residents, the town hall made the investments from its pension fund while its cash-strapped partner, NHS Lambeth, spent hundreds of thousands of pounds of taxpayers’ money on its anti-smoking programme.

The council’s latest investment accounts, published last week, show it has £9.3m of its employees’ pension fund invested in tobacco, with the value of its portfolio in the controversial industry increasing by £3.7m in 2009-10.

Martin Dockrell, director of policy and health at campaign group Action on Smoking and Health (Ash), said: “We think its highly regrettable a local authority whose work involves improving the health of people living in its borough, should be investing its employees’ pension money in an industry that will cost many of its employees their lives.

“We understand pension trusts have a duty to get the best return but they are not obliged to invest in unethical tobacco products. There are lots of ethical investments that would give a great return.”

In total the NHS spent £84m in 2009-10 on anti-smoking services. NHS Lambeth spent £361,000 in the same period.

A council spokesman said: “The council works within a highly regulated pension regime with strong governance procedures and with appropriate use of pension fund advisers and managers to oversee its pension fund investments.

“Lambeth Council has a policy of constructive engagement on ethical issues with the companies in which we hold investments.

"We do this as part of a consortium of like-minded investors and vote as part of the consortium in a way aimed at improving the ethics of these companies.

“The Pensions Investment Panel must balance a number of legal duties including maximising return on investment with sound risk management protocols including diversifying its portfolio to spread risk.

"It will continue to seek evaluations from its fund managers and advisers on the best way to balance those duties."

Lambeth’s investment in tobacco was disclosed in council papers to be discussed by its pension fund committee amid an ongoing battle with the Streatham Guardian over whether to release full details of its investments.

In the same week as the figures were published, this newspaper had a freedom of information request for full details of specific companies its pension fund invested in turned down, with the town hall claiming the request would be too time consuming.

Lambeth is no stranger to controversy relating to its pension fund.

Last year, it came under fire from international development charity Action Aid for investing in controversial mining company Vedanta, which was due to demolish a sacred Indian mountain. It no longer invests in the company.

Other investments in Lambeth’s £765m fund – which had 5,115 council employees pay into it last year and paid out to 6,518 pensioners – include £6.7m of shares in the aerospace and defence industries, and £46.8m in the oil and gas industries.