It’s not the first time that questions have been raised over investments made by or on behalf of Southwark Council – and it’s unlikely to be the last.
A co-signed letter, including from local MP Neil Coyle, takes the council to task for its pension funds including investment in fossil fuels. Of its £1.2bn pension fund, £60.6m is in fossil fuels – the vast majority through fund managers, but with £1.47m directly invested. To add insult to injury, campaigners point out that plummeting oil prices mean that the investments have lost the pension fund money.
The council not unreasonably argues that it has to seek maximum return on its investments, and if you were relying on them for your pension, no doubt you’d agree. It also says that divesting from fossil fuels would cost the fund – and of course, if you sell in a trough, that stands to reason.
But it’s wrong to couch the issue in terms of the impact selling the shares would have on the industries. If Southwark Council decided to rid itself of fossil fuel investments, it wouldn’t be so much about impacting on the respective businesses, but about the authority making a statement about the kind of investments it wanted to be associated with. It’s not about bringing down the industry, it’s about the council nailing its colours to the mast.
Having said that, it’s not so black and white as it may first appear. Who among us doesn’t use fossil fuels? And where do you draw the line? So whilst the tobacco and arms industries draw a fairly united response, should the council not invest in companies that sell alcohol? Or fast food? Or sugary drinks? Pharmaceuticals? The list goes on and on.
Which investments are always going to be ethically sound, and who decides that?