The council’s pension fund has defended its £51million investment in arms companies saying that it can use its financial muscle to influence firms to behave better.
The West Midlands Pension Fund, which invests cash on behalf of current and former workers at seven councils, also says it is backing the local economy by ploughing £40 million into small businesses in Birmingham.
It is one of the largest pension funds in the world with 277,558 members and valued at £11.5 billion.
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Fund bosses have responded following and .
A statement from the Fund committee said that they do not exclude firms on ethical grounds because people have different views on what is ethical.
It said: “From a pure financial perspective, if companies indirectly or directly involved in subjectively deemed unethical activities were excluded for investment purposes, there would be very few companies left in which to invest.
“This means that the Fund holds investments that some would find objectionable including companies linked to the aerospace and defence sector.”
Instead it says it uses shareholder engagement to influence the behaviour of corporations
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“If there is a serious issue and the company fails to act, then fund would make representations to the company expressing our concerns and may vote against the company management at a shareholder meeting.”
has also argued that he will be pressing for the fund to be used to support the local economy by investing in housing and creating jobs in the West Midlands.
But the committee said: “The Fund has had a long history investing locally within the West Midlands. The Fund has a significant allocation to the region in its direct property portfolio as well as a £40 million commitment to the Finance Birmingham fund which provides finance for small businesses in the area. All of these investments seek to secure and protect jobs as well as deliver commercial return.”
The investment in arms and aerospace companies was criticised as ‘hypocritical’ by the Coventry Campaign Against Arms Trade who pointed out that parts of the West Midlands is at the same time offering sanctury to refugees from the Syria conflict.
and called for funding to be moved towards renewable energy companies.