Trustees of the MP’s defined benefit pension scheme will divest from all investments linked to Russia, including HSBC, after a cross-party group of more than 60 MPs raised concerns about investments.
At a meeting last week they agreed to act immediately and ensure the fund did not have any holdings that were direct or indirectly linked to Russian oil and gas company.
This includes investments in the FTSE-listed bank HSBC. Caroline Lucas, the only MP for the Green Party pointed out that in 2020 HSBC was listed as one of the schemes top 20 holdings. However in a letter to trustees she expressed concerns about the bank’s equity stake in a number of Russian energy companies, including Gazprom, Rosneft, Tatneft, Lukoin and Novatek.
Lucas says: “HSBC doesn’t just do business with Russian oil and gas companies — it owns them. We therefore call for the immediate withdrawal of the fund’s investments from HSBC and from any other companies that are implicated in Russia in similar ways.”
Labour MP Clive Better, who is also on the board of trustees of the scheme added: “Should we be disinvesting from Russian interests? Yes, as quickly and as far as possible, though we have to do this through our fund managers.“
Lucas welcomed the trustees’ announcement that they would take action. She called for a “root and branch” investigation to ensure the schemes’ underlying holdings were not supporting the Russian regime in any way.
A number of pension schemes have began divesting from Russian holdings. These include Nest, Church of England, Legal & General and Aviva.
Last week the Church of England announced it had sold all £20m of investments in Russian companies. Meanwhile the Local Government Pension Scheme advisory board has also told its members running schemes for councils to examine their portfolios for links to Russia.
An HSBC spokesperson said: “In recent days, we have suspended our Russia-only funds and further reduced other funds’ exposure where this has been possible. As you would expect, HSBC is complying with all international sanctions.”
Campaign group Make My Money Matter called for trustees of pension scheme to take further action, pointing out that its recent survey had found 86 per cent of the UK public did not want their retirement funds in assets that supported the Russian regime.
On whether FTSE trackers should exclude companies with Russian investment, XPS Investment chief investment officer Simeon Willis says: “The exclusions of Russian assets from mainstream equity and bond indices is on the grounds of sanctions making them effectively worthless.
“Whilst my personal view is that index providers probably didn’t need much persuading to use their inclusion criteria as a basis to exclude Russian assets to the furthest extent possible, it is difficult to imagine them employing similar steps in mainstream indices in relation to companies indirectly impacted. However, there are already a variety of indices available that incorporate ESG considerations to varying degrees to exclude and tilt certain companies on the basis of ESG scores.
“There is a wide disparity across providers of ESG scores, although I don’t think this is entirely a bad thing as it is a highly subjective area. My feel it is these more specialised indices may choose to apply further criteria, although excluding companies like HSBC is quite extreme. However I do agree that considering detailed questions like this is more important than ever.”