Revealed: Sussex’s pension pot funds fracking companies

Revealed: The Sussex council cash invested in fracking

Revealed: The Sussex council cash invested in fracking

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COUNCIL chiefs have been criticised for ploughing tens of millions of pounds of “unethical investments” into fracking, tobacco and GM food corporations.

The Argus can reveal that the East Sussex Pension Fund, which manages pension contributions for Brighton and Hove City Council and East Sussex County Council, has more than £65 million of its pension portfolio invested in overseas energy companies – including £4.2 million in the world’s largest fracking firm ExxonMobil.

The fund, which also covers East Sussex Fire and Rescue Service, has a further £4.2 million investment in Encana Corp, £3.8 million in Southwestern Energy, £3.6 million in Spectra Energy, £3.21 million in Cenovus Energy, £2.29 million in Noble Energy and £1.3 million in Devon Energy – all leading American fracking companies.

The fund has also ploughed almost £6 million into Imperial Tobacco, responsible for cigarette and tobacco brands such as Lambert and Butler, JPS and Golden Virginia.

It has a further £4.9 million invested in the world’s largest genetically modified (GM) food producer Monsanto – dubbed “America’s third most-hated company” by health campaigners.

Caroline Lucas, MP for Brighton Pavilion, said she had been “lobbying councils for many years” to ensure investments were ethical but government legislation prioritised short-term gains.

Ellie Wyatt, of Frack Free Sussex, said councils should not be investing public money into companies that “damage health and the environment”.

She added: “Last month the British Medical Association voted to divest from the fossil-fuel industry. County councils, especially ones who claim to care about climate change, should be following suit.

“Fracking is a highly controversial issue in Sussex and council authorities should be able to assure their residents that there is no conflict of interest.

‘Unsustainable’ “We urge all council pension stakeholders to question why their pensions are funding fossil fuels, tobacco, mining, deforestation and harmful industries.

“Such industries are increasingly unsustainable in economic terms as well as environmental ones, and they are certainly not ethical investments. Do councillors and the pension beneficiaries want to profit from a lack of ethics, however short term?”

The fund’s joint-largest investment in ExxonMobil – America’s largest oil and gas company – is revealed three months after company bosses agreed to start disclosing risks associated with shale drilling and fracking to their investors following a long-running campaign by shareholders.

The company’s investors’ coalition announced in April that Exxon would be the first company to agree to disclose such risks. The company will publish a report by September that will detail fracking’s potential harm to air quality, water and roads and the risks of chemicals used.

ExxonMobil spokesman Alan Jeffers told Reuters news agency: “We understand people have concerns. This activity is somewhat new and not understood in some parts of the country. People want more information and the more they know, the better.”

However, ExxonMobil CEO Rex Tillerson, who led the company to $9.1 billion first-quarter profits this year, has appeared to show he is in favour of fracking – so long as it is not in his own backyard. In February, the energy chief joined a lawsuit to stop construction of a water tower near his Texas home that would be used in the fracking process to drill for oil.

The East Sussex Pension Fund has also invested interests in Encana Corp, which was last year subject to an investigation after residents in Wyoming claimed their drinking water had been contaminated after the company fracked in the state.

The American Environmental Protection Agency (EPA) concluded that Encana’s activities in the town “may” have tainted the groundwater near the town of Pavillion. But Encana swiftly responded to the report, saying it “strongly disagreed” with its findings and “any potential connection between hydraulic fracturing and Pavillion groundwater quality are conjecture, not factual and only serve to trigger undue alarm.”

EPA refused to have outside experts review its research, prompting Encana – the same company at the centre of the allegations – to provide Wyoming officials with $1.5 million in funding to review the study. Its findings are yet to be published.

Another of the pension fund’s biggest investments is in Monsanto – the world’s biggest manufacturer of genetically modified seeds.

On May 24, a worldwide protest against Monsanto saw more than two million people march in more than 400 different countries – including hundreds in Brighton and Hove – in a bid to stop the company lobbying against GM food labelling laws in America.

The Organic Consumers Association claims that more than 70% of processed foods in the US contain GMO ingredients, yet because Monsanto has “fought hard to prevent labelling laws” in America, this fact is kept from consumers.

Monsanto also produced the Agent Orange herbicide in the 1960s and 1970s – used by the US military in its herbicidal warfare programme in the Vietnam War.

The Vietnam Red Cross reports as many as three million Vietnamese people have been affected by Agent Orange, including at least 150,000 children born with birth defects.

In total, the East Sussex Pension Fund has £859 million in common stock with dozens of companies, including Apple, Microsoft, Tesco, Unilever, and pharmaceutical juggernauts. They form part of the fund’s entire £2.5 billion portfolio – which also includes investments in real estate, cash, gold, bonds and trusts.

Brighton and Hove Green Councillor Ollie Sykes, lead member for finance and resources at Brighton and Hove City Council, also said the Green Party had “lobbied for years” over investments.

He said: “The Greens are one voice on the six-strong investment panel and unfortunately final decisions are taken by fund managers.

“We continue to call for the fund to invest ethically, including looking at investment in infrastructure and services as has happened elsewhere.”

However, Conservative Councillor Andrew Wealls, who sits on the investment fund panel, said: “A Green campaigner’s devil energy company is also powering the heating, cooking, transport and health service needs of their neighbour.

“The scheme invests a substantial proportion of its assets in shares, to deliver enough returns to keep future pensions promises. The scheme currently does not have enough assets to do this so investment return is needed. Legally, we cannot overlay this with an exclusion of various sets of investments.

“What I believe needs to change is the dismal proportion of the fund invested in infrastructure projects.

“So long as we invest on a commercial basis there is nothing to stop the scheme supporting important infrastructure.”

East Sussex Fire and Rescue Service said investment in the local economy would “always be welcome” but ultimately it was a “decision for the fund to take whether to invest in individual local infrastructure projects”.

A spokeswoman for the service said: “East Sussex Fire Authority is legally obliged to offer its eligible employees membership of the Local Government Pension Scheme.

“The authority has no members on the investment panel although it does participate in the annual employers’ meeting. “The authority supports the fund’s current Statement of Investment Principles which requires fund managers to use their influence to encourage companies to adopt best practice in all key areas.”

In West Sussex, The Argus revealed earlier this year that the county council’s pension fund has investments in energy companies Celtique Energie and Cuadrilla, which protesters spent last summer campaigning against when it carried out exploratory drilling for shale gas in Balcombe.

Its fund has invested more than £3 million in Cuadrilla through its UK partner Centrica, which owns British Gas.

The council also admitted to having “very small indirect investments” via private equity managers to Celtique Energie.

However, despite suggestions that the investments could influence planning applications submitted by energy companies, council bosses said each application was decided on “planning grounds and nothing else”.

East Sussex County Council said it was “just the administering authority” of the pension fund and, along with Brighton and Hove City Council, did not wish to comment to The Argus.

Caroline Lucas, MP for Brighton Pavilion, said: “It’s good to see Greens doing all they can locally, but it’s disappointing others on the panel are blocking them.

“I’ve been lobbying the council for many years to ensure investments are ethical. I understand the difficulties caused by current government legislation, which takes a very narrow view of investment returns – by prioritising short-term gains over long-term economic stability.”

Who contributes to the fund?

According to the fund’s latest annual report, more than 70 organisations pay into the pension portfolio.

Some big names include:

Brighton and Hove City Council

East Sussex County Council

East Sussex Fire and Rescue Service

Eastbourne Borough Council

Hastings Borough Council

Lewes District Council

Rother District Council

University of Brighton

Wealden District Council

Bexhill Academy

Brighton Aldridge Community Academy

Glyne Academy

Hailsham Academy

Portslade Aldridge Community Academy

Surrey and Sussex Probation Board

Mears Ltd

Wave Leisure Trust Ltd

Brighton Dome and Festival

Care Quality Commission

Hove & Portslade CAB

Sussex Archaelogical Society

University of Sussex

Bexhill College

Brighton, Hove and Sussex Sixth Form College

City College, Brighton

Plumpton College

Sussex Coast College

Sussex Downs College

Varndean Sixth Form College

Hove & Portslade CAB

Sussex Archaelogical Society

University of Sussex

 

Politicians who help run the fund

Governance Committee – oversees the management of the fund:

Councillor Peter Jones, Tory, East Sussex County Council Councillor

Jeremy Birch, Labour, East Sussex County Council Councillor

David Elkin, Tory, East Sussex County Council

Councillor Keith Glazier, Tory, East Sussex County Council

Councillor David Tutt, Lib Dem, East Sussex County Council

 

Investment Panel - responsible for the fund’s investment strategy

Councillor Frank Carstairs, UKIP, East Sussex County Council

Councillor Richard Stogdon, Conservative, East Sussex County Council

Councillor David Tutt, Lib Dem, East Sussex County Council

Councillor Andrew Wealls, Conservative, Brighton and Hove City Council

Councillor Brian Redman, representing the district councils

Councillor Leo Littman, Green, Brighton and Hove City Council

Comments (23)

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9:05am Wed 23 Jul 14

Nosfaratu says...

Just shows you how out of touch Lucas and her Environmental Loony friends are with the real world.
Just shows you how out of touch Lucas and her Environmental Loony friends are with the real world. Nosfaratu
  • Score: 30

9:12am Wed 23 Jul 14

Morpheus says...

Pension or ethical - difficult decision, but you cannot live on ethical. What will Lucas have to say when the pension scheme has no money?
Pension or ethical - difficult decision, but you cannot live on ethical. What will Lucas have to say when the pension scheme has no money? Morpheus
  • Score: 27

9:13am Wed 23 Jul 14

Benji.uk says...

Pensions are set up for the good of their members to get maximum return on their investment. It is up to its members to ask for the investments to be in ethical stock.
Every pension is the same, the members choose.
Dont like it lobby the members, not turn it into some pointless political point scoring.
Pensions are set up for the good of their members to get maximum return on their investment. It is up to its members to ask for the investments to be in ethical stock. Every pension is the same, the members choose. Dont like it lobby the members, not turn it into some pointless political point scoring. Benji.uk
  • Score: 8

9:31am Wed 23 Jul 14

Plantpot says...

If you are opposed to capitalism, it could be argued that any investment is unethical.

This kind of article encapsulates why I loathe left wing politicians.
If you are opposed to capitalism, it could be argued that any investment is unethical. This kind of article encapsulates why I loathe left wing politicians. Plantpot
  • Score: -8

9:37am Wed 23 Jul 14

stevo!! says...

What is 'ethical' is purely a matter of opinion.

I loathe tobacco and everything to do with it, but it is a perfectly legal item, and I see no reason why people shouldn't invest in it.
What is 'ethical' is purely a matter of opinion. I loathe tobacco and everything to do with it, but it is a perfectly legal item, and I see no reason why people shouldn't invest in it. stevo!!
  • Score: -5

10:08am Wed 23 Jul 14

Btn4all says...

The story is Caroline Lucas 'lobbying' governement.......th
ere is a green councillor sitting on the investment panel...surely if there was any credibility in the story the green councillor sitting on the investment panel would either back caroline lucas in a statement???
Ideology is only credible when used alongside integrity!
The story is Caroline Lucas 'lobbying' governement.......th ere is a green councillor sitting on the investment panel...surely if there was any credibility in the story the green councillor sitting on the investment panel would either back caroline lucas in a statement??? Ideology is only credible when used alongside integrity! Btn4all
  • Score: 9

10:13am Wed 23 Jul 14

tinker111 says...

Morpheus wrote:
Pension or ethical - difficult decision, but you cannot live on ethical. What will Lucas have to say when the pension scheme has no money?
And when as a country we run out of energy ???
[quote][p][bold]Morpheus[/bold] wrote: Pension or ethical - difficult decision, but you cannot live on ethical. What will Lucas have to say when the pension scheme has no money?[/p][/quote]And when as a country we run out of energy ??? tinker111
  • Score: 0

10:16am Wed 23 Jul 14

Bluebeef says...

And Ms Lucas' pension pot is invested in..................
........... Dark Ages bonds?
We could always try government bonds: oh dear governments make and sell and buy and use guns. There may be a debate to be had around tobacco although its legal: really the rest of her objections are pathetic and that usual sort of small-minded attempted political point scoring which so degrades those in power in this country
And Ms Lucas' pension pot is invested in.................. ........... Dark Ages bonds? We could always try government bonds: oh dear governments make and sell and buy and use guns. There may be a debate to be had around tobacco although its legal: really the rest of her objections are pathetic and that usual sort of small-minded attempted political point scoring which so degrades those in power in this country Bluebeef
  • Score: 6

10:28am Wed 23 Jul 14

ThinkBrighton says...

If it keeps local taxes down , great
It shows that some councils do think of money saving and not just money wasting
If it keeps local taxes down , great It shows that some councils do think of money saving and not just money wasting ThinkBrighton
  • Score: 5

12:25pm Wed 23 Jul 14

Justin says...

I think it's unethical to oppose to fracking because not utilising all available energy resources keeps more people in fuel poverty. Also unethical to oppose GM food which is about good management of food resources and producing more food from the same land area.
I think it's unethical to oppose to fracking because not utilising all available energy resources keeps more people in fuel poverty. Also unethical to oppose GM food which is about good management of food resources and producing more food from the same land area. Justin
  • Score: -3

12:45pm Wed 23 Jul 14

fredaj says...

Justin wrote:
I think it's unethical to oppose to fracking because not utilising all available energy resources keeps more people in fuel poverty. Also unethical to oppose GM food which is about good management of food resources and producing more food from the same land area.
I think it is unethical to call other people unethical for having different ethics to your self.
[quote][p][bold]Justin[/bold] wrote: I think it's unethical to oppose to fracking because not utilising all available energy resources keeps more people in fuel poverty. Also unethical to oppose GM food which is about good management of food resources and producing more food from the same land area.[/p][/quote]I think it is unethical to call other people unethical for having different ethics to your self. fredaj
  • Score: 3

1:10pm Wed 23 Jul 14

argchat says...

Justin wrote:
I think it's unethical to oppose to fracking because not utilising all available energy resources keeps more people in fuel poverty. Also unethical to oppose GM food which is about good management of food resources and producing more food from the same land area.
Fuel poverty, it's a spin used by the other political parties. Doesn't matter how many fracking plants we have or how many wind turbines we plant, I have now been on this planet long enough to understand that our bills will never come down. Profits before people. So people will pick Solar and when enough people are doing that, the government will tell everyone they they own the sun and then tax you extra for having it. Nobody can win, ever unless you are the ones sitting at the top racking in the profits.
[quote][p][bold]Justin[/bold] wrote: I think it's unethical to oppose to fracking because not utilising all available energy resources keeps more people in fuel poverty. Also unethical to oppose GM food which is about good management of food resources and producing more food from the same land area.[/p][/quote]Fuel poverty, it's a spin used by the other political parties. Doesn't matter how many fracking plants we have or how many wind turbines we plant, I have now been on this planet long enough to understand that our bills will never come down. Profits before people. So people will pick Solar and when enough people are doing that, the government will tell everyone they they own the sun and then tax you extra for having it. Nobody can win, ever unless you are the ones sitting at the top racking in the profits. argchat
  • Score: 9

1:30pm Wed 23 Jul 14

salty_pete says...

It is only a vocal minority that considers "fracking" unethical; it ain't. We are talking about peoples pensions here, not about saving the world. Money, per se, doesn't have any ethics which maybe a difficult concept for some to understand. But for me I'd prefer my pension advisors to keep within the law, have long term strategies and make as much money for the fund as possible.
It is only a vocal minority that considers "fracking" unethical; it ain't. We are talking about peoples pensions here, not about saving the world. Money, per se, doesn't have any ethics which maybe a difficult concept for some to understand. But for me I'd prefer my pension advisors to keep within the law, have long term strategies and make as much money for the fund as possible. salty_pete
  • Score: 0

3:34pm Wed 23 Jul 14

getThisCoalitionOut says...

Corruption goes very deep into these organisations.

It is very sad to me just how disgusting these people in charge are and how unethical our government and the people at the top, really are.
Corruption goes very deep into these organisations. It is very sad to me just how disgusting these people in charge are and how unethical our government and the people at the top, really are. getThisCoalitionOut
  • Score: 1

6:02pm Wed 23 Jul 14

Martha Gunn says...

Lucas is 'lobbying'.

That is what she has always done and that is all she will ever do.

Totally detached - totally irrelevent - totally ineffective.
Lucas is 'lobbying'. That is what she has always done and that is all she will ever do. Totally detached - totally irrelevent - totally ineffective. Martha Gunn
  • Score: 1

6:25pm Wed 23 Jul 14

HJarrs says...

The trustees set investment criteria of pension funds within the law. Sadly, labour, conservatives, UKIP and lib dems care little about investing ethically and using the vast investments of pensions funds to be used to improve the environment of their members.

I hope that the trustees are questioning investing in stranded fossil fuel assets. We need to disinvest in fossil fuel companies as their value and share price is dependant upon reserves that cannot be exploited.
The trustees set investment criteria of pension funds within the law. Sadly, labour, conservatives, UKIP and lib dems care little about investing ethically and using the vast investments of pensions funds to be used to improve the environment of their members. I hope that the trustees are questioning investing in stranded fossil fuel assets. We need to disinvest in fossil fuel companies as their value and share price is dependant upon reserves that cannot be exploited. HJarrs
  • Score: 0

7:22pm Wed 23 Jul 14

John Steed says...

the unethical word appears popular today, however surely this creates a dilemma as at any planning application the councils concerned would have to declare an interest,
the unethical word appears popular today, however surely this creates a dilemma as at any planning application the councils concerned would have to declare an interest, John Steed
  • Score: 1

11:51pm Wed 23 Jul 14

nosolution says...

tinker111 wrote:
Morpheus wrote:
Pension or ethical - difficult decision, but you cannot live on ethical. What will Lucas have to say when the pension scheme has no money?
And when as a country we run out of energy ???
Armageddon. The worlds ever increasing population is sustained by oil i.e. food production, transport, heat, light e.t.c. When it runs out the numbers of humans will have to adjust to whatever available power sources can support them...
[quote][p][bold]tinker111[/bold] wrote: [quote][p][bold]Morpheus[/bold] wrote: Pension or ethical - difficult decision, but you cannot live on ethical. What will Lucas have to say when the pension scheme has no money?[/p][/quote]And when as a country we run out of energy ???[/p][/quote]Armageddon. The worlds ever increasing population is sustained by oil i.e. food production, transport, heat, light e.t.c. When it runs out the numbers of humans will have to adjust to whatever available power sources can support them... nosolution
  • Score: 0

7:36am Thu 24 Jul 14

HJarrs says...

nosolution wrote:
tinker111 wrote:
Morpheus wrote:
Pension or ethical - difficult decision, but you cannot live on ethical. What will Lucas have to say when the pension scheme has no money?
And when as a country we run out of energy ???
Armageddon. The worlds ever increasing population is sustained by oil i.e. food production, transport, heat, light e.t.c. When it runs out the numbers of humans will have to adjust to whatever available power sources can support them...
We already grow enough food for 14 billion, more are obese and overweight than going hungry and even then much oil based fertiliser is wasted. Population is predicted to top out at 10 billion.

Cheap oil will run out, but unconventional sources will remain, but by that time we rely on it, we will have surpassed being able to keep climate change in check.
[quote][p][bold]nosolution[/bold] wrote: [quote][p][bold]tinker111[/bold] wrote: [quote][p][bold]Morpheus[/bold] wrote: Pension or ethical - difficult decision, but you cannot live on ethical. What will Lucas have to say when the pension scheme has no money?[/p][/quote]And when as a country we run out of energy ???[/p][/quote]Armageddon. The worlds ever increasing population is sustained by oil i.e. food production, transport, heat, light e.t.c. When it runs out the numbers of humans will have to adjust to whatever available power sources can support them...[/p][/quote]We already grow enough food for 14 billion, more are obese and overweight than going hungry and even then much oil based fertiliser is wasted. Population is predicted to top out at 10 billion. Cheap oil will run out, but unconventional sources will remain, but by that time we rely on it, we will have surpassed being able to keep climate change in check. HJarrs
  • Score: 0

9:07am Thu 24 Jul 14

Thay Qon U says...

HJarrs wrote:
The trustees set investment criteria of pension funds within the law. Sadly, labour, conservatives, UKIP and lib dems care little about investing ethically and using the vast investments of pensions funds to be used to improve the environment of their members.

I hope that the trustees are questioning investing in stranded fossil fuel assets. We need to disinvest in fossil fuel companies as their value and share price is dependant upon reserves that cannot be exploited.
'Clarity begins at home' - Perhaps you could have a word with Sven Rufus the Green Party representative on the East Sussex Pension Scheme Panel who advise on the investment strategy for this pension scheme?
[quote][p][bold]HJarrs[/bold] wrote: The trustees set investment criteria of pension funds within the law. Sadly, labour, conservatives, UKIP and lib dems care little about investing ethically and using the vast investments of pensions funds to be used to improve the environment of their members. I hope that the trustees are questioning investing in stranded fossil fuel assets. We need to disinvest in fossil fuel companies as their value and share price is dependant upon reserves that cannot be exploited.[/p][/quote]'Clarity begins at home' - Perhaps you could have a word with Sven Rufus the Green Party representative on the East Sussex Pension Scheme Panel who advise on the investment strategy for this pension scheme? Thay Qon U
  • Score: 0

10:57am Thu 24 Jul 14

wippasnapper says...

Our planet this film shows use what these governments and organisations are investing in – it’s not for our health or our environment it’s to fill there pockets with money they dote see what they are doing they dote care all they care about is how much money they can make.
Its time we stopped making excuses and start stopping these governments and organisations investing in the disruption of our plant
http://www.bbc.co.uk
/iplayer/episode/b04
bdtqt/our-planet-fro
m-the-air-home
Our planet this film shows use what these governments and organisations are investing in – it’s not for our health or our environment it’s to fill there pockets with money they dote see what they are doing they dote care all they care about is how much money they can make. Its time we stopped making excuses and start stopping these governments and organisations investing in the disruption of our plant http://www.bbc.co.uk /iplayer/episode/b04 bdtqt/our-planet-fro m-the-air-home wippasnapper
  • Score: 2

1:37pm Thu 24 Jul 14

EdwardJones says...

If people would like to read more about the East Sussex County Council Pension Fund, please see: http://esccpensionfu
nd.wordpress.com/ It has a lot of info collected over the years on how the fund works and how it could change
If people would like to read more about the East Sussex County Council Pension Fund, please see: http://esccpensionfu nd.wordpress.com/ It has a lot of info collected over the years on how the fund works and how it could change EdwardJones
  • Score: 0

1:44pm Thu 24 Jul 14

EdwardJones says...

Btn4all wrote:
The story is Caroline Lucas 'lobbying' governement.......th

ere is a green councillor sitting on the investment panel...surely if there was any credibility in the story the green councillor sitting on the investment panel would either back caroline lucas in a statement???
Ideology is only credible when used alongside integrity!
The Green Councillor currently sitting on the panel, Ollie Sykes, is quoted in the article as saying they have been trying to change the investment practices of the pension fund, but they have been blocked by Conservative and UKIP councillors on the panel. If you were to ask Ollie I'm sure he would say that he backs Caroline's statement, what he says in the article already suggests they agree with each other!!!

You can see some of the efforts over the years of the Greens trying to change the investment practices of the ESCC Pension Fund:

http://esccpensionfu
nd.wordpress.com/201
4/03/18/frack-free-p
ension-funds-investi
ng-in-fracking-conce
rns-bh-green-party-s
tatement/
[quote][p][bold]Btn4all[/bold] wrote: The story is Caroline Lucas 'lobbying' governement.......th ere is a green councillor sitting on the investment panel...surely if there was any credibility in the story the green councillor sitting on the investment panel would either back caroline lucas in a statement??? Ideology is only credible when used alongside integrity![/p][/quote]The Green Councillor currently sitting on the panel, Ollie Sykes, is quoted in the article as saying they have been trying to change the investment practices of the pension fund, but they have been blocked by Conservative and UKIP councillors on the panel. If you were to ask Ollie I'm sure he would say that he backs Caroline's statement, what he says in the article already suggests they agree with each other!!! You can see some of the efforts over the years of the Greens trying to change the investment practices of the ESCC Pension Fund: http://esccpensionfu nd.wordpress.com/201 4/03/18/frack-free-p ension-funds-investi ng-in-fracking-conce rns-bh-green-party-s tatement/ EdwardJones
  • Score: 2

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