Scientists criticise fund’s holdings in firms including BAE Systems and Shell
The USS pension scheme has defended its strategy after scientists criticised its continued investment in companies that produce arms.
The Universities Superannuation Scheme is the main pension fund for UK academics, and it invests money in firms across a range of markets. This includes companies involved in arms production, such as BAE Systems and Raytheon. The scheme also holds shares in oil and gas companies, including as BP and Shell.
Fears about climate change have driven a push for universities to divest from fossil fuel companies, while tricky ethical questions surrounding weapons manufacturing have resurfaced following conflicts in Ukraine and the Middle East.
‘Utterly unacceptable’
Stuart Parkinson, executive director of the Scientists for Global Responsibility campaign group, told Research Professional News that it was “utterly unacceptable” that the USS was still investing in the arms industry—particularly given the current tensions in the Middle East.
“University staff and students have been campaigning for more ethical pensions for decades,” he said. “Pension funds should be invested in ways that help to make the world safer for everyone—not in war profiteering.”
A spokesperson for the USS said it has “a large, diversified portfolio that represents a slice of the global economy”.
“Our thoughts go out to everyone affected by the horrific events in the Middle East. We are monitoring the situation closely and, in particular, how financial markets are responding,” they added. “We will continue to act in the best long-term financial interests of the scheme and its beneficiaries, in line with our legal duties.”
The spokesperson said the scheme excludes companies that have ties to “controversial weapons”, including cluster bombs, white phosphorus and landmines, which are illegal in parts of the world. But they added, “We need only to consider the tragic case of Ukraine to understand the role the defence industry sadly has to play in today’s world.”
Fuelling fossil fuel firms?
In relation to investments in Shell and BP, the spokesperson said that divestment would make “no difference to the actual carbon emitted to the atmosphere and will not address the climate challenge”.
“Proactive engagement with the companies we invest in to drive positive change and shift their ‘business-as-usual’ models does make a difference,” they said.
“We’d rather be an investor with a seat at the table than have no influence. We recognise that fossil fuels have a role to play in the near term, but they won’t have a role in the long term. As a long-term responsible investor, we have a responsibility to actively engage with the companies we invest in to drive positive change and must encourage the assets and markets we invest in to make the transition to a low-carbon future.”