The following review is intended to make a case that it would benefit Falkirk Council Pension Fund to divest from weaponry & arms manufacturing, based on the papers provided by Falkirk Council for Pensions Committee Agenda – 18 March 2025.
The committee papers hold the position of refusing to divest from arms manufacturers, claiming there is a difference between Responsible Investment and Ethical Investment, and that it would be too difficult to establish ethical investment principles.
The papers state in section 4.5 that it’s not possible to find a firm definition of what is ethical as ethics may differ from person to person, and that the Environmental, Social and Governance (ESG) issues are instead a question of material financial risks.
It is reasonable to argue that it is irresponsible to invest in arms manufacturing not solely because of the ethics of the matter, but because a critical part of Corporate Social Responsibility is to hold responsibility for how the money invested is then used. In essence, for an investment to be a responsible one (in terms of Corporate Social Responsibility), the Pension Fund must be able to be held accountable for the actions of their investors.
So, as the Falkirk Council Pension Fund is investing in arms manufacturing (and fossil fuels); the fund members are siding with these industries and are essentially betting that there will be no negative material financial risks from the investments being made.
Investing in arms manufacturing has brought short term capital to the pension fund in previous years, but these investments will need to be reconsidered as more and more people turn their back on supporting the manufacturing of weaponry.
Having investments in less than ethical businesses may make it surprisingly more difficult to implement policies and practices within Falkirk council and within local government that would otherwise benefit the community; as the Pension Fund has shown a precedent for choosing arms manufacturing investments over alternative local investment opportunities.
This is not just about financial gain—it’s about the message it sends and the barriers it may create in building a more just and community-focused future.
Falkirk Pension Fund already considers environmental factors, and say they are willing to consider geopolitical issues, but these are hugely intertwined issues which will be easier to consider together, especially when we step back slightly to look at the bigger picture.
Climate, conflict, and community impact do not exist in isolation—they are connected, and responsible investment must reflect that.
The Falkirk Council Pension Fund has a Statement of Responsible Investment Principles (SRIP) with 6 main principles.
How will investing in arms manufacturing affect the implementation of the Statement of Responsible Investment Principles (SRIP), such as principle 3 where “disclosure on ESG issues by the entities” invested in by Falkirk Council Pension Fund is expected?
As the money invested is used for arms manufacturing, how do the pension fund members feel that they’re represented by this, consistent with principle number 5 of “working together with likeminded partners”?
As stated earlier, investing in arms manufacturing will continue look bad on paper, even when looking back on previous years, even quarter to quarter.
These investments reflect badly on both town and community and show a preference for unethical investments for short term gains instead of considering a longer-term plan to bolster the local community or by investing in renewable energy, for example, which is only beginning to show the possible profits from wind, solar and hydroelectric investments.
To expand slightly further on this, as Scotland has already shown clear aptitude in renewables it’s reasonable to estimate that this sector will only increase in efficiency and can be a shining example of not only Scotland’s innovation, but Falkirk Council’s intuition by seizing these opportunities early on.
The Investment Principles state there should be a balance so that when divesting from irresponsible industries there is also an engagement and potential investment elsewhere to restore and further diversify the fund’s investment portfolio.
Now is the time to divest from war technologies and start engaging with Scotland’s efforts to reach ESG goals throughout the country, not just within the Falkirk Council Pension Fund.
The controversial companies (highlighted in section 4.8.1 of Agenda Item 9) only account for less than 1% of the Fund’s assets. This means it’s reasonably possible to divest from complicit companies and work to engage with other sectors that are still diversified from the fund’s current investments.
Why isn’t Falkirk Council Pension Fund engaging and investing in renewables? Again, Scotland is a perfect country to harness wind power especially, as well as hydro power from the North Sea.
Another local investment opportunity is with Falkirk Football Club. This is something that will not only bring capital to the pension fund but can raise awareness of the many options available to the youth who are looking for career opportunities as well as community with their peers. As mentioned in the Summary section of Supporting community ownership of leisure and sports assets (Local Government Association, 2023): “Community sports and leisure asset ownership can offer a ‘natural’ partner for councils, the challenge is to turn the potential into sustainable and impactful solutions that takes the learnings from successful examples elsewhere.”
The arguments for divesting from fossil fuels have already been made and considered by the board, however investing in arms manufacturing will have the exact same consequences. Consider the global consequences alongside the fundamental process of arms manufacturing; such as the raw materials extracted, the leftover waste from production, the injuries and deaths caused by the weapons being manufactured, the human rights violations at each step in the process. Then we must consider the chronic health conditions caused by the toxic dust and fumes inhaled; the raw materials and manual labour necessary to rebuild in so many locations after each strike; the PTSD suffered from both victims and soldiers; the hate speech and violence caused by forced immigration. The list of dire consequences is endless for an investment that seems harmless when it’s solely viewed on a yearly report.
When considering investment in weaponry, we cannot simply consider the original investment made to the arms manufacturer. There must be a core understanding that this investment only helps to prolong millions of people’s pain and suffering in the hopes of a pension for a small number of people in return.
As the climate crisis is intertwined with the consequences from all investments made into arms manufacturing, it’s reasonable to conclude that anyone willing to divest from fossil fuels and engage with more responsible forms of energy productions as investment opportunities; can be willing to divest from the arms industry which is currently pouring kerosene onto the raging fire of global climate breakdown.
Connecting voices, sharing truth, and supporting the Palestinian struggle through education, advocacy, and community action.
