Lothian Pension Fund slams campaign groups’ tactics

£8bn fund has faced criticism from divestment campaigners

The Lothian Pension Fund, the second biggest Local Government Pension Scheme (LGPS) in Scotland, has attacked activist groups for creating “adverse publicity” and for “being selective in their use of facts” in their campaigns against the fund.

The £8bn (€9bn) LGPS scheme came under media fire last year for £83m in fossil fuel investments while its client East Lothian Council had made carbon neutral pledges. Campaigners said it exposed double standards.

Now the fund has hit back at the criticism this month with an attack on the groups’ tactics in its new e-zine called ENGAGE.

"The fund does not take sides in the moral debate of these investments."

The Edinburgh-based fund accuses campaign groups of generating adverse publicity and being selective with facts to further their causes “often with an incomplete understanding of the investments that they oppose”.

But Lothian does say that “we can use the views of lobby groups, where supported by credible evidence, to support our assessment of financial risk. As a responsible investor, LPF engages…..and our belief that doing so as an active investor is more responsible than divestment.”

LPF’s most recent annual accounts also cover the theme, saying: “In contrast to the baseline views of many typical activist representations the Fund does not finance these companies – the Fund is simply a shareholder – it does not take sides in the moral debate of these investments.”

In the new 18-page e-zine LPF outlines its ESG activity, including membership of ClimateAction 100+ and membership of the UK Asset Owners RI Roundtable and the new Scottish Asset Owners RI Roundtable.

It also highlights successful engagement with BlackRock on its voting and engagement policy, in collaboration with Brunel Pension Partnership, the Church Commissioners and Lloyds Banking Group. Lothian has a £54m commitment to BlackRock.

Doug Heron, CEO for Lothian Pension Fund, says there are plans to measure the carbon footprint of its entire portfolio and also plans to look at impact measurement of its portfolio.