Things I never expected to hear myself saying, part 1

"This isn't about ethics, or climate change or the environment, this is about primary fiduciary duty."

Gulp.

Me, a week or two back, in pensions committee, arguing that we should instruct our fund managers to support the BP and Shell Shareholder motions going to their AGMs, which call for them to further consider and justify the economic as well as environmental grounds for investing in tar sand oils.

Tar sands (or oil sands) are among the world’s dirtiest fuels: their extraction produces on average three times the greenhouse gases of conventional oil. The pollution, deforestation and wildlife disturbance associated with tar sands developments also threaten the traditional livelihoods, health and wellbeing of indigenous communities. In addition, serious questions have been raised about the financial risks of oil sands. It's far from clear that they represent a prudent investment.

Fair Pensions is campaigning alongside a number of other organisations, including Greenpeace, to encourage pension funds to support the shareholder motions which are going to the BP and Shell AGMs in April and May. You can find out more about their campaign, and contact your pension fund to ask them to support the motions, by going to their Counting the Cost website.

As a member of Lewisham's Pension Committee, we are regularly reminded by officers that a 1% drop in pension fund value equates to having to find £1m from the Council's budget to meet its pension liabilities and that we can be held personally responsible if we go against legal advice and the fund loses money (don't think it works the other way round). And I've gradually learnt over the past few years that talking about ethics gets you nowhere with fund managers and gets lawyers very alarmed and reminding you of your primary fiduciary duty - our main responsibility is to maximise profits for the pension fund and sod the consequences. So a campaign that encourages pension fund members to challenge fund managers on their own terms, rather than 'woolly ethics' was music to my ears.

In this case, with regards to the tar sands motions, officers advised us to delay making a decision until a report on the tar sands issue has been published by the Local Authority Pension Funds Forum (LAPFF), of which Lewisham is a member. If the LAPFF recommends supporting the motions, then Lewisham is likely to do so, although the decision has ultimately been delegated to the Exective Director for Resources, as the committee won't be meeting again before the AGMs. If all the local authority pension funds that are members of the LAPFF support the shareholder motions, this will send a clear and powerful message to the management of BP and Shell.

Do take a look at the Counting the Cost website for details of how you can support the campaign.

Calling all those in Lewisham Council's Pension Scheme

If you work for Lewisham Council, or one of the contractors that use the Council's Pension Scheme (eg Glendale) please take a few moments to complete this online survey on socially responsible investment issues. (It's the intranet so should only work for Council employees. Some of you may already have filled in a paper version of the survey sent with your last pensions magazine).

Lewisham Council's Pension Fund has a socially responsible investment policy, but it is one of positive engagement, rather than excluding any particular stocks or sectors. As a result, we have investments in most sectors, including arms manufacturers, tobacco companies, companies that test on animals etc. While positive engagement with companies can work in certain sectors, eg a fund manager putting pressure on a clothing company to stop sweatshops and improve workers' rights, it is arguably little more than lip-service in other sectors (eg arms and tobacco companies).

Pension fund trustees have a duty to take into account the moral concerns of pension fund members, as well as a 'primary fiduciary duty' to get the best financial return. However, we need clear evidence of members' concerns to support any stance we take on ethical grounds. So if you don't like your pension fund being invested in any particular sector or company, or you would like fund managers to take a stronger stance on certain issues, this is your chance to say so. As pension fund trustees our hands are to an extent tied unless we are given a mandate by pension fund members to act.

Trustees have a duty to get the best possible financial return on our pension fund investments and when the return on investments is insufficient to meet the Council's contributions, this gap has to be filled from the Council's budget, with a potential knock-on effect on Council Tax bills. That said, good investment returns and socially responsible investment are by no means mutually exclusive and 'ethical' funds and stocks have in a number of cases outperformed less ethical companies in recent months.

Burma Protest

Saturday's protest outside the TOTAL Petrol station on the corner of Whitefoot lane and Verdant Lane went very well, with about 30 other protestors, mostly from the Burmese community but also including a few local people. It was a loud and lively demo, which attracted considerable interest from passers-by. We handed out lots of flyers about the campaign and local people were generally warmly supportive.

TOTAL is still one of the biggest foreign investors in Burma, and the money the military dictatorship get from their joint venture deal with TOTAL (approximately $480m/year) arguably helps to keep them in power. As I mentioned in my previous post, Lewisham Council’s Pension Fund has nearly £4m in TOTAL Oil. As a member of the Pensions Investment Committee, I will be wanting the fund managers to explain at the next meeting exactly what dialogue they have had with TOTAL’s management about their ongoing involvement in Burma, and whether our continued investment in the company is really in keeping with our socially responsible investment policy. We have a policy of 'engagement' with companies on issues of concern, rather than simply boycotting them, but companies need to know we are serious and will disinvest if their activities are helping to fuel horrendous human rights abuses.

Photographers from both the local papers turned up, so hopefully there will be some coverage of the protest this week. It was also reported on Indymedia and the TOTAL out of Burma blog.

Lewisham Council Pension Fund has £12m invested in Burma 'dirty list'

I have just found out that Lewisham Council has nearly £12m of its pension fund invested in companies named on the Burma Campaign's 'dirty list', including Total Oil. That includes £11,697,000 in the pension fund plus £171,000 in procurement activity last year.

Anyone who has seen or read about the brutal oppression that has taken place in Burma will surely be horrified to hear that Lewisham Council has so much money invested in companies who do business with the Burmese military junta. It makes a complete mockery of the council’s so-called socially responsible investment policy.

Burma's democracy leader, Aung San Suu Kyi has called for a boycott of all foreign investment in the country and business with the military regime as the quickest way of bringing it down, yet companies such as TOTAL Oil continue to fuel the oppression. For that reason, a small number of us, including some Burmese campaigners, will be staging a short protest on Saturday at 11am outside the TOTAL Petrol Station on Whitefoot Lane, Catford, SE6 1TP.

In November, all members of the Lewisham Council Pension Fund will be sent a survey asking for their views on ethical investment issues. The survey will ask how importantly members rate a company’s record on employment conditions, human rights, corporate governance and environment and whether there are any specific sectors, such as tobacco or the arms industry, that they would prefer the pension fund not to invest in. This presents an ideal opportunity for members to send a clear message to the fund managers that investing in companies that prop up dodgy regimes is not acceptable.

Since being appointed to the Pension Fund Committee last year I've been questioning fund managers on how their investment choices meet our socially responsible investment policy (SRI), but it always comes down to the fact that profit is placed before any ethical concern. It's incredibly frustrating. Pension fund trustees have a duty to act in the best financial interest of members, but we should also take into account their moral concerns. If enough council employees return their survey asking us to strengthen our SRI policy, the committee will have a duty to at least consider this.

Even if you put aside the moral arguments, there are sound financial reasons to engage in fair trade, respect human rights and act to prevent climate change.

Catch up - conference, pensions, Barcelona

Been rather silent on the blogging front lately; had a busy couple of weeks before Easter with meetings most evenings, then Green Party Conference in Swansea, then loads more meetings, including council AGM, then a quick trip to visit my newborn niece (Jessica Rose) in Suffolk and to help out Norwich Greens with their election campaign for a day, then Barcelona for a week over Easter to visit Nigel. Been catching up on things since then and normal blogging service will resume shortly!

Green Party Conference
Green Party Conference was interesting, with debate on the Severn Barrage/Swansea Lagoon (what with it being in Swansea), the leadership debate (should we have one or not and if so, what powers, if any, should they have), we updated our international policy (which had some embarrassingly out-of-date bits about the handover of Hong Kong etc in it), I went to a fringe about voting systems and PR (proportional representation) led by Malcolm Clark from Make Votes Count, helped lead a 'green bloggers' fringe with Jim and Natalie (was nice to meet a few fellow green bloggers I hadn't met before such as Philip and Jim too). Was very inspired by a panel discussion about environmental education and sustainability in schools - Wales, in particular Swansea, seems to be streets ahead of England in some ways with this (every school in Swansea gets their recycling collected for free, unlike in Lewisham). Also found out a bit more about Transition Towns. Anyway conference was weeks ago and it was amply covered at the time here and here.

Pensions Investment Committee
Couple of interesting meetings before Easter. Lewisham Council's Pensions Investment Committee meeting (of which I'm a member) had presentations from Fair Pensions and the Local Authority Pensions Fund Forum (LAPFF) at my request. The committee agreed to join the LAPFF and to survey members of the pension fund (of which there are lots, as the council is the largest employer in Lewisham) about their views on socially responsible investment. As trustees of the pension fund we have a primary fiduciary duty, which means we must place the financial interests of the fund and its members above all else. However, Alex van der Velden from Fair Pensions argued that we would be failing to do this if we didn't scrutinise companies' behaviour on social and environmental issues, as companies risk losing money through reputation damage if they don't take account of 'ethical' issues (eg an oil company with poor safety standards being responsible for an environmentally-catastrophic leak, a sportswear company found to be sourcing its clothes from sweatshops or an arms company revealed to be bribing corrupt officials in dodgy regimes to buy its goods).

We also have a duty to take into consideration the moral views of our members, so if, for example, 90% of respondants to our survey said they didn't want us to invest their pension money in tobacco, there would be grounds for us to disinvest. Anyway, I was pleased with the outcome of the meeting - while the pension fund continues to invest in sectors I'd rather my pension didn't invest in, I think joining the LAPFF and surveying members' views are both steps in the right direction.

Mayor's Commission on Empowering Communities and Neighbourhoods
Another meeting before Easter worth mentioning was the Mayor's Commission on Empowering Communities and Neighbourhoods (catchy title, huh?). After a few meetings hearing evidence and discussing communities and neighbourhoods in general, we are now looking at the nitty gritty of how we would like to change the way the council and elected representatives engage with residents, and in particular whether to change the existing area forums. General consensus at the meeting seemed to be to move towards regular ward based forums, with larger spending powers, rather than the existing 3-ward forums. I think this is a good idea and look forward to seeing what is proposed.

Barcelona
Did the journey by train again, which was fine, but cost me an arm and a leg as all the cheaper tickets had sold out weeks in advance. Once again I was very impressed by how cyclist-friendly the city is. They have just launched a new bike hire scheme, Bicing, to encourage people to cycle around the city. Basically, you pay €24 subscription for the year, then you can borrow a bike for only 30 cents for half an hour, rising to €3 an hour after 2 hours (the scheme is designed for short journeys of less than an hour around the city, you use one of the other bike hire shops for longer periods). They are still rolling the service out, but there will soon be 100 bike stations around the city with 1,500 bikes to hire. I think how it works is that when you register and get your card, which unlocks the bikes, you give your credit card details and are charged according to your use. Sounds like an excellent idea - we should have a similar scheme in London! (Darren, Jenny - Green group budget proposal for next year?!)