Embarrassing: KCC’s continued failure to divest

March 16, 2018

Yesterday, once more, our KCC representative, Martin Whybrow, brought the urgent debate about divestment to KCC. Speaking at full council, he challenged the council’s treasury management report, triggering a lengthy public debate on the issue. The webcast can be viewed here: https://kent.public-i.tv/core/portal/webcast_interactive/336306/start_time/5423000

Here’s a transcript of his argument:

“I thought the treasury management report should not pass without a word or two about the £136 million of externally managed investments. I hate to pour cold water on the usual back-slapping that stems from the investments mostly doing okay – although not all of them – in markets that have been remarkably buoyant for a remarkably long time but…

“Yesterday we put out a press release entitled ‘Special support for Mums on No Smoking Day’. Andrew Scott-Clark, our head of public health, was quoted as saying ‘Smoking remains one of the major causes of preventable death so quitting is the best thing a smoker can do… we are committed to supporting Kent smokers who want to quit.’

“Most members will know where I am heading with this because I have banged on about it enough times before. But I will continue to do so until we actually do something about it.

“When we look into these funds, what do we find? British American Tobacco, the world’s largest cigarette and tobacco company. Philip Morris, which exports its products of death to 180 countries. The third largest, Japan Tobacco, operating in 120 countries. And we wouldn’t want to miss one of the big four would we, so we have Imperial Brands, previously known as Imperial Tobacco, who presumably re-branded out of embarrassment for their core product.

“How hypocritical of us to preach to the Kent public and hold a public health remit but still have investments in these companies.

“And don’t get me started on the likes of McDonalds, with regards public health – do we have any views on obesity in Kent? Then there are the fossil fuel companies with their increasingly ‘stranded assets’ that other investors around the globe in droves are ditching but we still cling to.

“There are two excuses that we use, neither of which holds water.

“First, that we have expert financial advisors. Well, firstly they are not infallible – not all of the funds have performed well even in mostly buoyant markets – and anyway, we are the client. We should define the rules, as any private or institutional investor would, and the advisers then work to this.

“The second excuse is ‘fiduciary responsibility’ or, in layman’s terms, we have to make as much money as possible within our risk profile. You are not telling me that there are not other large, safe stocks – actually in expanding rather than shrinking sectors – that wouldn’t perform as well or better but without the embarrassment and hypocrisy.

“There is no performance data anywhere that says unethical stocks perform better than ethical ones.

“The government is finally paving the way for divestment by pension funds so that they can ‘mirror members’ ethical concerns’. We should divest of these treasury management investments immediately, today, and the Kent Pension Fund should at least follow when the new regulations are introduced, hopefully later this year.

“We should stop defending the indefensible and end this embarrassment every time we put out perfectly worthy public health and environmental press releases and policies.”

The old excuses that Martin mentioned were duly churned out and there were tortuous efforts to claim that KCC should not make moral decisions (despite the fact that the council does so every single day – such as with the no smoking press releases). The other opposition parties rallied round well and there was even one Tory, Sean Holden, who eloquently agreed with the argument.

There was plenty of subsequent social media activity and reporting from the press. Keeping up the pressure, making sure the arguments have very public airings such as this and continuing to embarrass them at every opportunity has to be the way to go until they finally follow ever more other councils and institutions and do the right thing.

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