Environment Agency pension fund slammed for holding stakes in UK water companies | Utilities

The Environment Agency’s pension fund holds stakes in a string of UK water companies – despite the watchdog calling for industry bosses to be jailed for shocking levels of pollution, can reveal the Guardian.

An analysis of the investments of the Environment Agency’s pension fund shows it holds shares or bonds worth £28million in six of the biggest water companies.

Emma Howard Boyd, chair of EA, last month called for chief executives and board members to be jailed if they monitor serious and repeated pollution, as they appeared undeterred by the measures. enforcement and court fines for violating environmental laws.

The EA found that seven water companies oversaw an increase in serious incidents last year compared to 2020, with 62 serious pollution incidents for 2021 – the highest since 2013.

Filings for the year to March 31, 2022 show the fund invested more than £3million in Southern Water, which the agency said last month had the highest total pollution rate in 2021 Southern was fined a record £90million in July last year after deliberately dumping billions of liters of raw sewage into protected seas, in a lawsuit brought by the Environment Agency.

The fund’s largest water reserve is at Thames Water, putting £12.8m behind the provider, which discharged raw sewage into rivers 5,028 times in 2021.

The investor, which manages the pensions of retired and current government agency staff, has also invested funds in United Utilities, Severn Trent, Yorkshire Water and Anglian Water. Last month, Anglian handed its chief executive Peter Simpson over £1million in salary and bonuses despite his poor pollution record.

Asked about the investments, former Undertones frontman Feargal Sharkey, who now campaigns on water issues, said: “This proves yet again the utter obscenity that has become the regulation of the water industry. the water.

“When the highly appointed regulator by Parliament whose function it is to monitor and minimize the environmental impact of the water industry actually benefits from that environmental impact as much as the company’s executives and other shareholders, it is an obscenity that must be stopped.”

The Environment Agency Pension Fund, part of the Local Government Pension Scheme, has 39,500 members, 11,300 of whom contribute, and £4.5bn of assets under management. Its huge portfolio includes investments in blue-chip stocks such as Tesco and Vodafone, as well as infrastructure companies.

Howard Boyd, who is also a government adviser on trade and a former director of fund manager City Jupiter, steps down as the agency’s chairman in September. She also chaired the Environment Agency’s Pension Fund Investment Sub-Committee until November 2020.

Sharkey said the investment role, alongside her position as chair of the government agency, constituted a “massive conflict of interest”. He added: ‘She must be sensitive enough to see the irony that water and sewerage companies are currently being investigated by EA and Ofwat for what EA has called widespread serious non-compliance with regulations. It should have occurred to them not to invest in water companies. The joint sewage treatment investigation began last year.

A spokesperson for the Environment Agency’s pension fund said it was “legally separate” from the operational and regulatory functions carried out by the Environment Agency and subject to “legal rules, a different governance and decision-making”. Investment decisions are made by a third-party asset manager rather than the fund itself.

He added: “Wherever the EAPF is exposed to investment from UK water companies, it is through portfolios managed externally by Brunel Pension Partnership, a pension pooling provider of UK water companies. local communities.”

The agency is currently dealing with the impact of Europe’s worst drought in decades, which is hitting homes, factories, farmers and freight across the UK and the continent.

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The Liberal Democrats have called for water company bosses to be banned from giving themselves bonuses until they fix their leaky pipes. The party found that the bosses of England’s water and sewer companies have handed themselves around £27m in bonuses over the past two years.

The study on the fund’s investments did not detail the breakdown between shares and bonds held in the water companies.

Dolores W. Simon