AN MSP has hit out at a pension fund which manages Clacks council workers' money for investing in “risky” fossil fuels.

On the other hand, the scheme says that influencing corporations as stakeholders is potentially more beneficial for the environment than passing shares to “less responsible” owners.

Green Mid Scotland and Fife representative Mark Ruskell spoke out against council pension funds which are investing in companies that have been involved with industries responsible for climate change.

Instead, he wants them to divest and reinvest in social housing and green energy.

One such organisation is the Falkirk Pension Fund, which also operates the scheme on behalf of the Clackmannanshire and Stirling local authorities.

According to a joint report by Common Weal, UNISON Scotland and Friends of the Earth Scotland, the local fund invested close to £120million in fossil fuel companies directly and indirectly, including oil and gas as well as coal exploration and extraction corporations.

The MSP said: “Investing in risky fossil fuels that we cannot afford to burn is the wrong path for public sector pension funds.

“Putting money locally into social housing and renewable energy would ensure our pension funds create local jobs while we secure our retirements.

“Councils have so far been reluctant to step in and direct independently managed pension schemes, but they need to listen to pension fund members and deliver what’s best for long term growth of funds and the planet.”

The Falkirk investment in fossil fuels represents 6.5 per cent of the fund's total value and the scheme is one of just a handful to have put money into what environmentalists is calling for.

According to the same report, £86m has been put into the infrastructure fund with £45m going directly into social housing and renewable energy.

There are also plans to involve the fund in a £1.18m housing development at Burnside in Clackmannan as part of the town's regeneration project. If it all comes together, there could be 35 new homes for social rent.

A spokesperson for the fund said the scheme invests in a wide range of assets and is legally obliged to pursue the best financial position possible.

They added:“The fund regularly reviews its approach to environmental, social and governance matters and has recently made changes its policy to place a greater emphasis on climate change risk.

“This includes measuring the fund’s carbon footprint to assess its consistency with the aims of the 2016 Paris climate change agreement.

“The fund also actively invests in social housing and, in partnership with the Lothian Pension Fund, has invested in several renewables infrastructure projects.”

The fund is a member of the Local Authority Pension Fund Forum, which aims to maximise shareholder influence.

The spokesperson said: “By engaging with companies, the fund and its managers are better able to encourage sound corporate behaviour.

“This is potentially much more beneficial to the environment and society than outright divestment which could simply lead to shares being passed to less responsible owners.”