Dundee councillors will take legal advice before deciding whether to continue investing millions of pounds of public sector pension payments into multi-national tobacco companies.
The city council’s superannuation sub-committee was expected to rule on the matter on Monday but members agreed to delay this until March when lawyers are due to report back on the up-to-date legal position and available options.
Last month, The Courier revealed £47 million had been invested in British American Tobacco (BAT) and £15 million in Imperial Tobacco through the Tayside Superannuation Fund (TSF).
Acting convener Councillor Jimmy Black said he doesn’t want to see investment in tobacco but stressed committee members have an obligation to protect the £2 billion employee pension pot.
”We weren’t ready to make a decision,” he said. ”We want to look into all the legalities before making an informed decision.
”Personally, I am absolutely against investing in tobacco. However, there are legal details which people on the committee have to follow.
”I don’t think anyone on the committee wants to invest in tobacco, especially when the Government is doing what it can to limit the damage caused by tobacco in our communities.
”But you can’t make a rushed decision on an issue like this. We have to ensure that we are protecting council workers’ pensions now and in the future.”
But Lib Dem councillor Fraser Macpherson, who has been an outspoken critic of public sector pension investments in the tobacco industry, was disappointed that legal advice had not been sought in time.
”I am anxious that the city council as soon as possible grasps the nettle of disinvesting from any companies who do not act in an ethical manner,” he said.
In global investments, tobacco companies can be classed in what is known as a ”vice fund”, which also includes gambling, defence/weapons and alcohol industries.
Organisations can invest in these areas with hopes of yielding a higher return on their money.
But for a number of public bodies, especially charities, it is not an option they can be seen to benefit from and as such they may invest in what is known as socially responsible investing (SRI).
SRI is any strategy which seeks to consider both financial return and social good.