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Hampshire County Council slammed after £80 million pumped into British American Tobacco

CIVIC chiefs have been slammed after pumping £81 million into a tobacco company.

http://www.dailyecho.co.uk/News/15323523.Council_slammed_after_funds_pumped_into_tobacco_firm/

Hampshire County Council’s pension fund has invested the money into one of the biggest tobacco companies in the world, British American Tobacco (BAT).

The council top the list of UK authorities who have investments in tobacco.

However, some of the world’s largest investment organisations have called for UK authorities to pull out of tobacco investments.

One big name to sell its tobacco shares is the French insurance giant Axa.

The UK Sustainable Investment and Finance Association (UKSIF), said it was ‘silly’ for one part of the council to be trying to promote health while the pension fund was, indirectly, promoting smoking.

Simon Howard, chief executive of UKSIF said: “Many local authorities now have responsibility for tobacco control and smoking cessation activities.

“If Hampshire is one of the local authorities which has responsibility for stopping smoking then it also seems silly for their pension fund to own tobacco shares. They are perfectly able to sell these shares.”

The county council currently manage a pension fund of £5,213 million on behalf of more than 300 employers and public bodies, and around 155,000 current and former staff.

Defending their actions, a spokesperson from the authority said: “Social, environmental and ethical considerations are taken into account when assessing the financial potential and suitability of investments.

“The independent pension fund has a fiduciary duty, by law, to invest fund monies to achieve the best possible financial return.”

Pension fund panel and board member, Councillor Bruce Tennent (pictured), said the council couldn’t be an organisation that puts ethics above financial return.

Cllr Tennent, who has been on the board for seven years, said: “Yes, ethical considerations are taken into account.

“There are break-downs in high and low-risk investments and ethical and non-ethical investments. We can’t be a board who puts ethics above monetary interests.”

BAT has its UK base in Southampton and employs 1,200 at its Millbrook site which is its global centre for research and development department and is also home to IT, finance, and distribution departments.

The firm has been in the city for more than a century but ceased cigarette manufacture here more than a decade ago. However, it employs more staff now than at any time ins recent history.

BAT declined to comment on the issue and referred the Daily Echo to The Tobacco Manufacturers Association, who said the industry was a sound investment.

Giles Roca, director general of the organisation, said: “Fund managers are free and indeed required to make the best financial decisions for their investors.

“Many commentators would point to the tobacco industry’s strong financial performance in recent years as a reason why its shares are considered an attractive buy for pension funds.”

While acknowledging the need for the county council to get the best deal for their pensioners, public health charity Action on Smoking and Health (ASH) said that pension fund boards had to think seriously about balancing financial obligations with health promotions.

Director of policy, Hazel Cheeseman, said: “Increasingly fund managers around the world are seeing tobacco as neither acceptable nor sustainable.

“Over the long term we ask funds to think seriously about how they balance both their financial obligations and the obligations local councils have to promote health.”

This week the World Health Organization (WHO) called on governments to implement strong tobacco control measures as part of its

WHO director general Dr Margaret Chan said: “By taking robust tobacco control measures, governments can safeguard their countries’ futures by protecting tobacco users and non-users from these deadly products, generating revenues to fund health services.”

When asked to comment, several local and national cancer charities declined to do so.

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