Oxfordshire council pension fund to avoid tobacco and coal investments

Oxfordshire County Council's Pension Fund Committee, which includes representatives from other organisations, made the decision to exclude these investments as part of a strategy to invest sustainably.

The move comes with the adoption of a new responsible investment policy at its September meeting.

The committee identified thermal coal, tar sands, and tobacco as sectors to avoid investing in due to their wide-ranging impacts.

Thermal coal is the highest carbon-emitting energy source, while tar sands are one of the most carbon-intensive ways to produce crude oil.

Tobacco products, meanwhile, are responsible for killing up to eight million people each year, the council said.

Companies producing "controversial" weapons that breach United Nations’ human rights standards have also been excluded from investments.

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

Councillor Donna Ford (Image: Bicester Town Council) "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."

The county council said 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 said engagement with companies that have significant activities in tobacco, coal, or tar sands production is unlikely to 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".

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 in 2015/16 to assist the administering authorities of their pension scheme in ensuring compliance with national Local Government Pension Scheme and other pension regulations.