Trust’s investment ethics questioned


The charitable trust’s lack of an ethical policy for investing around £150 million of the isles’ oil funds, which leaves some of its money tied up in shares in arms manufacturers, tobacco firms and companies accused of violating human rights, has come under fire once more.

A report on the matter is due this summer and councillor-trustees Jonathan Wills and Rick Nickerson have served notice that they would be attempting to get the trust to shift some of its many millions of pounds from its current tracker fund to an ethical portfolio.

Tracker funds, as the name suggests, attempt to track the performance of the FTSE shares index itself, rather than setting out to beat it. But at a trust meeting last Thursday, Dr Wills said this essentially meant a computerised “robot” was deciding on the sort of companies which the trust’s money was invested in, ensuring it was likely to include firms which were concerned in the supply of phosphorous gas used by Israel against the Palestinians in Gaza, other arms companies, tobacco firms and purveyors of pornography.

He made it clear he was “not going to let up” in his efforts to ensure the community’s money is not being used to buy shares in such companies and asked whether the trust needed to form an investment sub-committee to monitor investments on a weekly basis.

Concern was also raised by independent trustee John Scott over the fact that the trust is trading at a loss on the foreign currency markets. Financial controller Jeff Goddard said that at around £3 million, foreign currency made up a “small component” of the trust’s investments and that the fund managers had recently visited Shetland and “put forward a convincing case” that losses were down to the “most peculiar” last 18 months which have seen an almost unprecedented financial crisis enveloping the globe.

But Mr Scott remained to be persuaded. “One man’s gain is another man’s loss,” he said. “In May I will propose that we get rid of [the fund managers in question].”

There have been a stream of attempts over the years to get the charitable trust to cease investing “unethically”, but change is continually resisted by trustees who are concerned about cherry-picking and the difficulties inherent in deciding what is abhorrent and what is not.

Trustee Allison Duncan last week re-asserted his opinion that the money men employed to invest Shetland’s money should be left to get on with getting the best possible returns without being burdened with any moral considerations.

But trustee Gussie Angus has on three separate occasions tried to get investment in the tobacco industry halted, asking why the trust wants to kill its beneficiaries.

Question marks are also often raised against holding portfolios of shares which include arms manufacturer BAe Systems and mining company BHP Billiton. There was also an effort made in the 1980s to move the trust away from any involvement in companies connected to the apartheid regime in South Africa.

So far, none of those attempts has come to fruition and Mr Nickerson admitted he was “not overly optimistic” about getting fellow trustees onside when he finally gets the report he asked for almost 12 months ago. He believes there are green and ethical investment portfolios which perform strongly and that at least a portion of the trust’s investments should be allocated in such a manner.

“I think we need to see where we can make progress on this, although I’m not overly optimistic,” he told The Shetland Times. “It seems to be the majority of trustees are not in favour of doing anything much, but we’ll keep banging the drum. What we need to do is look at packages of ethical portfolios and if they’re performing well then we should obviously look at investing in them.”


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