Friday, 11 January 2008

*BAE's bad value

Barnet Greens highlight BAE's bad value
(From the Barnet Green Party website)

Barnet Council pension fund's £3 million pounds worth of shares in weapons maker BAE Systems would have doubled in value to more than £6 million last year if the fund had sold them and bought stock in wind turbine makers instead, Barnet Green Party has revealed.

BAE Systems gained 16 pct in 2007 but Vestas Wind Systems, the world's largest wind turbine maker, saw its shares soar 131 pct, taking its market value to a mighty 13.4 billion euros, fast catching BAE.

Fund managers can no longer claim that they can't invest ethically because they get better returns in unethical stocks such as BAE. In fact that excuse has been false for a number of years.

BAE's recovery takes the shares only fractionally above above where they were 10 years ago, whereas investments in Vestas have multiplied 33 fold in value since the company was first listed in May 1998.

Not all ethical or environmental stocks have had as a stellar a trajectory as Vestas but in recent years the sector has consistently performed as well as or better than the broad market. Over the past five years the Stoxx European sustainability index has climbed 61 pct, compared with a 46 pct gain by the Stoxx 50 index of European blue chip companies.

Even in Britain alone, where the ethical and environmental sector is relatively small because of lack of government encouragement, the FTSE4Good UK 50 index has kept pace with the benchmark FTSE 100 both during 2007 and over the past five years as a whole.

According to the Campaign Against the Arms Trade, Barnet Council's pension fund held shares worth £3,255,178 in BAE Systems in mid-2007. Barnet Green Party is once again calling on the fund's managers to sell that immoral stake and invest the money in ethical companies.

There is every prospect that 'green' industries will continue to grow strongly in Europe as governments step up their spending so that 20 pct of energy comes from renewable sources by 2020, a target agreed by all 27 European Union countries including Britain.

Germany has already created an estimated 200,000 jobs in industries that help fight climate change and Britain could do the same if the government and investment managers such as those who control Barnet Council's pension fund woke up to the economic opportunities of these new technologies.

"Personally, I believe BAE should convert its factories to the manufacture of wind turbines, solar panels and marine power machinery," said Barnet Green Party member Andrew Newby, who compiled the figures. "You never know, 'British Airpower Equipment' could even end up making more money than the group does from its current evil products."

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