22 Jan 2009

Council Budget and Ethical Investment

It was Full Council Thursday night and the Budget was up for discussion and debate - various votes - some of which had my support, opposition or abstention - wont go into all that here - do see the webcast for details - basically it was a business-as-usual budget in many ways that does not restructure to take account of the urgency re climate change and Peak Oil - however it does make some important moves - like support for businesses to cut carbon - an excellent scheme - but nothing like enough.

Photos: more of those sheep up near Ash Lane from a couple of weeks ago - looking down to Ebley and the Mill where we had the Full Council meeting

One issue that again was raised was ethical investment - an issue raised a fair few times here - it was again unsatisfactory but again a sign of hope as the Cabinet member suggested Scrutiny look at the issue.

I fully accept that it is difficult for the Council to invest ethically - and that we urgently need leadership on this from our Government. Even the United Nations in 2006 issued it's Principles for Responsible Investment and several Council pension funds are signed up to it. Sadly the UK has trailed behind other European countries in this - however, some local Council's have achieved ethical investment policies and therefore the report we were issued in Appendix B of the Council papers was disappointing...

...it was not even 2 sides of text and has not researched those Councils or other organisations that have successfully invested more ethically. Some have been committed to public health and refused to invest in tobacco industries that lead to some 100,000 deaths a year. In Norwich councillors have expressed concerns regarding pension funds investments in arms companies: fund managers will now have to explain exactly where they are proposing to invest money so informed decisions can be made.

Camden Borough seeks to ensure it's pension fund considers climate change amongst other ethical issues. Surely Stroud District should also ensure tax-payers money is used to enhance our policies to tackle climate change? Are we really happy to see funds invested in places that potentially are working against our policies?

Indeed there is evidence to show that a company that pays inadequate attention to environmental and other ethical issues may carry higher risks and reflect how the business is managed as a whole. Also if we want the best possible financial return in the long-term then we need to be arguing that we must not be increasing our CO2 emissions which forecasts indicate are likely to impact catastrophically on our economy.

The Oxford Council on Good Governance in their recent paper to Oxford University about ethical investment write: "The performance of ethical investment funds in each major world economy has been – at worst – indistinguishable from that of their conventional rivals. The evidence shows that there are no longer financial costs to ethical investment behaviour. In the absence of any trade-off then, those who would oppose Socially Responsible Investment strategies should recognise that they are defending for its own sake an ethical position which explicitly refuses to draw any lines at all."

Clearly ethical investment opens the door to untold ethical dilemmas but these cannot be solved by taking this extreme position. We need to find a better way forward. I am hoping the issue can now be discussed in more depth at our next scrutiny meeting....time for bed for me as been a busy day - more of that in a blog another day plus more re Full Council meeting if I get around to it!

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