Council's pension fund investment in fossil fuels is criticised

A Scottish council pension fund has one of the highest percentage investments in fossil fuels by a local authority in the UK, according to new analysis.

Friends of the Earth (FOE) said 9.4% of the Dumfries and Galloway fund went into the sector.

It said that went against wider efforts across Scotland to reduce dependence on fossil fuels.

Dumfries and Galloway Council said the fund's main aim was to ensure members got benefits when they were payable.

The FOE analysis found Scottish council pension funds had invested £1.8bn in fossil fuels.

The report on UK local government pension schemes and their investments indicates that, between 2015 and 2017, Scottish council investments in fossil fuel firms increased by £146m.

'Investment vehicles'

The analysis found that Dumfries and Galloway Pension Fund invests the second highest proportion of its fund in the sector in the UK.

Meanwhile, it showed that Strathclyde Pension Fund, Scotland's largest, has invested £803m - 4.1% of its total fund - in fossil fuel companies.

The figures were calculated after campaigning organisation Platform obtained details of funds' investments for 2016/17.

The report comes after the Scottish government pledged to phase out new petrol and diesel cars and vans across Scotland by 2032, eight years ahead of the UK government target.

Scottish ministers also recently announced a ban on fracking, used to recover gas and oil from shale rock.

Ric Lander of Friends of the Earth Scotland said: "Scotland's councils are ignoring the realities of climate change.

"Their investments in deeply destructive fossil fuel companies fly in the face of Scotland's wider efforts to phase out fossil fuel cars and ban fracking."

'Principal objectives'

The charity has called on council funds to divest from fossil fuels.

Dumfries and Galloway Council said its fund's main objective was to deliver benefits to members and their dependants.

"In view of the principal objectives, the pensions sub-committee take the view that non-financial factors should not drive the investment process at the cost of financial return on the fund," a statement said.

"The fund does not actively disinvest in companies for ethical, social or environmental reasons as this may impact on fund returns and would not accord with the principal objectives."

It added that legal advice had been that no policy should be put in place to restrict the choice of investments and that environmental issues could only be taken into account if consistent with seeking the best returns.