Stop investing in arms trade, university pension fund is told

The Universities Superannuation Scheme’s stake in former cluster bomb manufacturer Textron is an inappropriate use of savings, campaigners say

December 1, 2016
People standing among rubble of destroyed buildings, Aleppo, Syria
Source: Getty
Scarred: Aleppo, Syria after a Russian cluster bomb attack. Civilians made up 97 per cent of all cluster bomb casualties in 2015

Academics are calling on the UK university sector’s main pension provider to sell its stake in a controversial arms manufacturer that has profited from selling cluster bombs, as pressure grows on higher education institutions worldwide to follow ethical investment plans.

Ahead of its annual meeting of institutions on 1 December, the Universities Superannuation Scheme (USS) has been urged to cut its ties with Textron, a US multinational arms firm that, until September, sold cluster bombs – internationally banned weapons that can inflict terrible injuries on civilian populations.

The munitions, which have been used in Syria and Yemen in recent years, contain small “bomblets” that can spread across an area the size of a football field before detonating. According to Cluster Munition Monitor 2016, civilians made up 97 per cent of all cluster bomb casualties in 2015, with unexploded bomblets creating dangers similar to those of landmines.

More than 100 countries have banned the trade of these weapons, although the US is not a signatory to a 2008 convention prohibiting their manufacture or use.

In addition to Textron, academics have also called on the USS, which represents about 180,000 current staff in mainly pre-1992 universities, to divest from other firms with links to “controversial” arms, including nuclear weapons, such as the UK-listed BAE Systems and Babcock International and Italian defence contractor Finmeccanica.

More than 2,200 USS members have signed a petition organised by ShareAction, which campaigns for ethical investments, calling on the USS to divest from companies that manufacture such weapons.

Tim Valentine, emeritus professor of psychology at Goldsmiths, University of London, and former trustee of ShareAction, said that weapons such as cluster bombs were “banned under international conventions, so it is not reasonable to simply ignore members’ concerns on this point”.

In fact, the USS has a legal duty to listen to its members about their environmental, social and moral concerns about investments as outlined by a 2014 Law Commission review, claimed Professor Valentine.

“It seems USS has made up its mind that it will not adopt an ethical stance on this,” he added, having attended a meeting with USS representatives on 23 November.

In a statement, the USS said that although it was an “active and responsible investor”, its “trustee’s primary duty is to ensure there is enough money to pay the pensions of our 375,000 members”.

“We do not rule out investment in any sector on purely ethical grounds,” it said.

It noted that Textron was a “diversified manufacturer with interests in aircraft, industrial and automotive products” and that it had recently announced that it would “discontinue production of sensor-fused weapons meaning it will no longer be producing cluster munitions”.

The USS added that it “takes its members’ views very seriously” and would consider feedback from a recent survey in light of its responsible investment policies.

The call to divest from the arms trade comes after scientists at the Institute for Cancer Research in May 2016 expressed their surprise that their pension funds at the USS were invested in tobacco firms.

The USS, which has assets worth almost £50 billion, owns £215 million in British American Tobacco, which makes Lucky Strike and Benson & Hedges cigarettes, and £116 million in Imperial Brands, which is behind Gauloises and Golden Virginia tobacco.

The scheme has also faced calls to sell its substantial stakes in oil and gas multinationals, including Royal Dutch Shell (worth £573.6 million at the pension fund’s most recent valuation, in September), BP (worth £133.5 million) and Exxon Mobil (£106.9 million).

In 2014, more than 3,000 people signed a petition calling for the USS to listen to members’ views on these investments, while the scheme’s top investment officer, Roger Gray, met university climate change experts in April to discuss issues around fossil fuel divestment.

“The USS is a unique scheme because many of its members are actually world-leading experts on climate change and are well-placed to advise on this issue,” said Professor Valentine.

“As universities actually employ researchers who warn about climate change, institutions need to do more bring their own investments into line with the views of these experts,” he added.


Print headline: Quit investing in arms trade, academics tell USS

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