Nearly a year ago I blogged about Cornwall Council’s investment via its pension fund in tobacco companies. This moral dilemma of is it right for a council to invest in tobacco is a difficult one. On one hand the council is often a lead in a campaign of healthy lifestyles and should lead by example, but it also has a duty to make sure people’s pensions are invested for the best.
Today, on the BBC website they are running a story on how much other council’s are investing in tobacco companies. These council’s have been highlighted because they are also the lead in Stop smoking campaigns. It will seem too many that these council are being preaching double standards. As on one hand they are saying, stop smoking, but still investing many millions into tobacco. Of course investing in tobacco is a profitable business as I blogged about HERE .
My last figures showed Cornwall Council is investing just under £25 million in tobacco companies. However, that is only two percent of the total investment in the pension fund, but £25 million is still a large chunk of money. In the BBC report various east of England council’s have disclosed via the FOI Act their total investment. This amount to over £167 million with many investing the same amounts as Cornwall Council.
The largest investor in tobacco is Hertfordshire who invest roughly £44.6m. This works out as £40,270 per person. Cornwall’s population is roughly half that of Hertfordshire. Cambridgeshire who invest a similar amount (£25.3m) and is similar in size (600,400) in population as Cornwall invests £41.7k per head. For Cornwall, this investment would equal £45,45k per person.
The question is should a council invest in something that is harmful to health? Is the reasoning of a best return for any investment justification for investing?
Martin Dockrell, director of research and policy at Ash, has said in the BBC report:
“From 2013, local councils will have a responsibility for leading local efforts to reduce the burden of death and disease from smoking, yet many of them are the largest tobacco shareholders in the area.
Furthermore, if a council has some somewhat ethical investment policy, there could still be a loop-hole to still invest in tobacco. As according to Mr. Dockrell:
Ethical investment rules mean fund managers are permitted to say they will only “invest in tobacco when they can prove that there is no other investment that can match the value”.
I believe if a council is a lead in healthy lifestyles and health campaigns it should not be investing in products like tobacco. Sadly though, I doubt this will change because of the returns from investing in tobacco.