Oxfordshire Pension Fund divests from tobacco, thermal coal and tar sands

Employees at local councils and other organisations who pay into a major pension scheme have been told that an important step has been taken as part of a strategy to invest sustainably.

Investments into companies that derive significant revenues from thermal coal, tar sands and tobacco production have been excluded from investments by the county’s Pension Fund Committee, which is hosted by Oxfordshire County Council with representatives from other organisations as members.

With the adoption of a new responsible investment policy at its September meeting, the committee decided to exclude investments in thermal coal, as it is by far the highest carbon-emitting source of energy; tar sands, as it is among the most carbon-intensive means of crude oil production; and tobacco, as its products are responsible for killing up to eight million people a year.

The policy also excludes companies producing controversial weapons where their use is complicit in breaches of United Nations’ human rights standards.

The Oxfordshire Pension Fund is committed to actively engaging with the companies it invests in, as this approach is in the long-term interest of the company, investors, and broader society.

However, it is unlikely that engagement with the companies that have significant activities in these areas will lead to meaningful change in their behaviour. The fund and its investment pool manager Brunel will, therefore, concentrate engagement efforts on sectors and companies where engagement will be more effective.

Councillor Donna Ford, Chair of the Pension Fund Committee, said “The pension fund is committed to considering environment social and governance factors in investment decisions to ensure the long-term interests of the fund are protected.

“The fund’s investment view is that tobacco companies represent a financial risk to the fund as they face intense pressure from investors, regulators and consumers, and therefore the decision to divest from tobacco is the right one.

“As a fund, we also have a commitment to be net zero by 2050. Thermal coal and tar sands are some of the most intense emitters of greenhouse gases, as such they are not compatible with our net zero target, so we will be divesting from these highly polluting sectors and reallocating money to more sustainable investments.”

More information

The Oxfordshire Pension Fund is managed by a committee of councillors who are advised by the county council’s director of finance and an independent financial advisor.

All public sector pension schemes were required under the Public Service Pensions Act 2013 to set up a pension board with effect from 2015/16 to assist the administering authorities of their pension scheme in ensuring compliance with national Local Government Pension Scheme and other pension regulations.

The board's key roles are to support and challenge the Pension Fund Committee as it carries out its legal responsibilities.

More information about the board, the committee and the work that they do is available on Oxfordshire County Council's website or the Brunel Partnership’s website. For more information about the pension fund’s policies and investments visit the Oxfordshire Pension Fund investment webpage.