The UK’s largest pension scheme, the £44bn (€55.5bn) Universities Superannuation Scheme (USS), should not invest in companies its membership deems “morally unacceptable”, according to a new campaign.
The campaign, organised by responsible investment NGO ShareAction and the University and College Union, said the fund’s investments included “a host of firms” that raised ethical concerns for its members, including on matters such as climate change and labour standards.
In a statement, the ‘Listen to USS!’ also cited exposure to tobacco companies and weapons manufacturers as matters of concern.
A spokeswoman for the fund pointed to its track record of considering environmental, social and governance (ESG) matters, and noted that it was working with politicians to “help build understanding” of climate change issues.
The campaign said it was encouraged by the recent UK Law Commission report on fiduciary duties, which suggested pension investors could incorporate ethical investment concerns if it had the backing of its beneficiaries.
Tim Colbourn, a faculty member of the University College London’s Institute for Global Health and a USS member, said it was “clearly right” for the trustees of USS to be securing financial returns, which he said was their primary responsibility.
However, Colbourn said such an approach need not be at the expense of the membership’s view of ethical considerations.
“Short-sighted investment actually overlooks the fact that, in the long term, many ‘ethical’ views may also be financial - for example, there is mounting evidence to suggest fossil fuels are systematically overvalued,” he said.
ShareAction’s chief executive Catherine Howarth said USS had initially led the way in responsible investing but fallen short in its efforts since appointing a responsible investment officer in the 1990s.
“This could be redressed through undertaking a thorough survey of members’ ethical views, followed by a proper evaluation of whether such views, if acted upon, would cause financial detriment to the fund,” she argued.
A spokeswoman for USS said the fund took ESG concerns “very seriously” and had a long history of engaging with companies.
“Our approach,” she added, “includes engaging with policymakers to drive change. For example, we regularly meet with civil servants and politicians to help build understanding of the investment considerations of climate change and encourage the development of an appropriate regulatory framework to facilitate the transition to a low-carbon economy.”
The spokeswoman added that the USS was still evaluating the Law Commission’s report to understand its impact on trustees.