Posted: Fri 4th Mar 2022

Ukraine conflict: Flintshire Council administered pension fund to offload stake in Russian oil company

News and Info from Deeside, Flintshire, North Wales
This article is old - Published: Friday, Mar 4th, 2022

A public sector pension scheme administered by Flintshire Council is to disinvest its holding in a Russian oil company following Vladimir Putin’s unprovoked attack on Ukraine. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

Administrators of the Clywd Pension Fund have confirmed to Deeside.com that its stake in Lukoil is to be offloaded due to the invasion. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

The fund is part of the Local Government Pension Scheme (LGPS) and provides death and retirement benefits for local government employees in North East Wales. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

Recent data stated there are over 49,000 Clwyd Pension Fund scheme members, 17,000 contributors, 18,000 deferred contributors and 14,000 pensioners. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

According to data published by UK Divest, Clywd Pension Fund investments include £1,852,505 in Lukoil, the second largest company in Russia after Gazprom. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

Lukoil is a Moscow headquartered oil and gas company and is responsible for around 2% of the world’s oil production. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

The company operates thousands of petrol stations including some in the United States. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

Lukoil has been operating under US sanctions since 2014 due “to continued Russian efforts to destabilise eastern Ukraine.” ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

The company took the unprecedented step yesterday of urging Putin to end his invasion of Ukraine. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

Lukoil’s billionaire founder Vagit Alekperov, called for an “immediate cessation of the armed conflict” and expressed concern over the “tragic events.” ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

Clywd Pension Fund also has a £20m stake in British energy giant BP which owns 20 per cent of Russian state-owned energy firm Rosneft. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

BP announced last week it was selling its share in Rosneft worth US$14 billion following the start of the conflict in Ukraine. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

In a statement to Deeside.com, on behalf of Wales Pension Partnership and the Local Government Pension Scheme in Wales, Cllr Clive Lloyd said: ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

“We are deeply saddened by the situation in Ukraine and our thoughts are with the Ukrainian people.” ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

“Our total exposure to Russian Investments is minimal at less than 1%.” ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

“Even so, in light of the terrible events we have witnessed and the economic sanctions imposed internationally, as a collective we have decided to divest from these holdings as soon as is practically possible.” ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

“Given the circumstances, we do not believe that engagement with these companies presents a viable option.” ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

According to a report by the BBC, Welsh councils have up to £200m tied up in Russian funds and companies as part of their pension schemes. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

The Welsh Local Government Association said councils are reviewing their position after the invasion of Ukraine. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

The £200m represents less than one per cent of the £20bn Welsh councils have invested overall in their pension schemes beyond Russia, the BBC states. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

The WLGA said all eight pension funds in Wales follow responsible investment policies under national guidance. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

It added: “Investment managers are reviewing their investment strategies and there has been engagement across all eight pools in England and Wales.” ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

Earlier today Welsh Government said they are working with other public bodies in Wales “to identify and take action on any investments held associated with the Russian state”. ‌​‌‌‌​‌‌‍‌​‌‌‌​‌​‍‌​‌‌‌​‌​

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