The World Bank indirectly invests part of its $18.8 billion staff pension fund in companies in industries such as coal and tobacco, holdings that clash with the development institution's own calls for ethical and low-carbon investing.

In an internal post to staff seen by Reuters, the World Bank’s treasurer said about 40 per cent of the fund’s equity holdings are actively or passively invested against equity index funds, which include companies in industries associated with environmental and health problems.

Internal discussions

Two World Bank sources, who asked not to be identified, showed Reuters discussions between staff and managers on an internal site, as well as a research note produced by employees.

The note expressed concern about the pension and gave details of the holdings, questioning why the bank does not use socially responsible alternatives.

In its own lending practices across the developing world, the bank refuses to invest in tobacco production and has banned financial support for the construction of coal-fired electricity except for the poorest countries that lack other options.

The Washington-based bank’s pension fund, details of whose holdings have not previously been reported, was ranked a “laggard” in transparency and managing climate risks in a report released by the Asset Owners Disclosure Project, which pushes asset owners to address climate change risks.

It ranked lower than the pension funds of companies including British Coal and the state oil fund of Azerbaijan. – Reuters