Environment Agency criticised for over £28.3 million of pension investments in several of the UK’s most polluting water companies

"A blatant conflict of interests”


by Angling Times |

THE ANGLING community has been left flabbergasted over revelations that the EA has invested millions of pounds worth of bonds and shares in the very water companies it’s entrusted to police.

Sharing figures and information from the agency’s own sources, river campaigner Feargal Sharkey Tweeted: “Can you explain how the Environment Agency Pension Fund seems to be the owner of £28,304,421 worth of investments in six of England’s nine water companies?” Alongside key figures, he pointed out the companies’ poor records on sewage pollution and abstraction.

“Why is the EA pension fund making money out of environmental destruction? That’s the nub of this, it’s a blatant conflict of interests,” Sharkey told us directly.

“It’s an appalling, one-fingered gesture to everyone working to protect rivers! I include the EA’s own staff here, who are being let down by the leadership. How is it possible that the EA is profiteering from the destruction of the very environment they’re meant to be protecting? It beggars belief.”

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From savings to sewage

The revelations could hardly come at a worse time for the agency, as public indignation grows over the plight of Britain’s rivers, with English waterways the worst performing of all the home nations.

Looking deeper into the facts and figures, several glaring sticking points emerge from the EA’s own Pension Fund Website (www.eapf.org.uk). For example, investments worth over £12 million are held in Thames Water, in spite of the company’s chequered history with the EA and the fact that long-standing Pension Committee member Colin Chiverton is also acting Area Environment Manager for the Thames region.

Readers will remember the stink surrounding Thames Water to the tune of £32 million in fines from 2017 to 2021 issued by... yes, you’ve guessed it, the EA. This included the agency’s biggest-ever pollution case, with £20.3 million in fines issued for a staggering 1.4 billion litres of illegally discharged sewage.

Other big players on the Environment Agency Pension Fund (EAPF) portfolio include Anglian, Severn Trent, United Utilities, Yorkshire Water and, last but not least, Southern Water, ranked among the very worst of major water companies for pollution and subjected to a £90m fine in 2020. All of which begs an obvious question: Is the EA capable of robustly defending the environment when its pension funds are directly tied up with those polluting our rivers on an industrial scale?

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A poor reflection of EA staff?

Another key issue in the pensions debate is who makes the decisions and whether these reflect the ethos of staff as a whole. The EA itself told us that “in all instances where the EAPF has exposure to UK water company investments, it is through portfolios managed externally by Brunel Pension Partnership, a pooling provider for Local Government Pension Funds”.

It appears that many EA personnel have not been aware of these investments. Those we spoke to were understandably cagey and genuinely surprised by the revelations. Without wishing to be named, one staff member told us “we all want a safe pension pot, but this is a pretty bizarre decision. It’s not a great reflection of the work we do and I certainly wouldn’t want to be thinking about my pension while investigating a major pollution incident.”

Feargal Sharkey himself was keen not to tar the agency’s conscientious personnel with the same brush. “Every time I run into EA staff on the water they’re doing their best, in tough circumstances and without exception,” he said. “Investing in polluters is a betrayal of these people more than anyone. It’s completely counterintuitive. “

The Angling Trust’s Martin Salter was also concerned about conflicting interests and a disconnect between management and staff, saying: “it’s important for the Government’s main environmental regulator to be as independent as possible from the industry it’s supposed to be regulating. I’m not sure how comfortable our hard-working colleagues in the EA would be with their pension funds being invested in some of the companies they’re taking action against.”

Responding directly to AT, an Environment Agency spokesperson said the EAPF was “a leader in responsible investment and officers have no role or influence in how the Environment Agency regulates the water industry.” It also added that water company investments represented only 0.9 per cent of the EAPF’s £4.8bn assets (as of 31 Dec 2021).

The agency continued that there are “a number of measures in place to ensure there’s a strict separation between the regulatory roles of the EA and the functions of the Pension Fund,” which is “legally separated from the operational and regulatory functions” of the agency and “managed by third party Asset Managers.”

Where the money goes

The figures

Environment Agency investments in the three worst ranked water companies for sewage spills in English rivers, according to 2021 figures (Source: Environment Agency)

KEY STATS AT A GLANCE

£28.3 million

Total EA investments in six water companies, including several of the worst polluting such as Thames and Southern Water.

1,000+

Number of times water companies release raw sewage into rivers daily, according to Daily Telegraph reports, despite officially only being permitted to do so during “exceptional circumstances” such as heavy rainfall.

8 Million+

Number of anglers, wild swimmers, paddlers and other water users at direct risk of health problems caused by poor water quality, including gastro-intestinal illness and ear, eye, skin and respiratory infections.

0%

Of English rivers, lakes and streams were in “good health” according to the Environment Agency’s own figures released in 2020. This compares with roughly 40 per cent across Europe.

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