HIGHLAND Council Pension Fund is being urged to adopt a charter for responsible investment after a report claiming to have identified that it held at least £140 million of “ethically questionable” shares.

The study from the Highland-Palestine group said the fund’s claims that environment, social and governance issues did not stand up to scrutiny and its approach to investment management was deficient and ineffective.

It said the HCPF has invested millions of pounds in harmful industries, such as fossil fuel extraction, armaments, nuclear, mining, gambling and alcohol – and called for the change when the fund meets in March.

The report details £72m shareholdings in Sands China, the biggest developer, owner and operator of resorts and casinos in Macao, the largest gambling market in the world and the only location in China offering legal casino gaming.

“Our research shows that their policies and procedures are lagging well behind current models of good practice in financial management,” said the group.

“Scotland is emerging as a centre of ethical finance. Why is Highland Council dragging its feet over this?”

It added: “To our knowledge, a number of different local organisations, including ourselves, have raised concerns with the pension fund over its investments only for these approaches to be rebuffed. This is unacceptable.”

A Highland Council spokesperson said: “The Highland Council Pension Fund is independent from Highland Council and decisions regarding investment principles are made by the Pensions Committee (membership of which includes but is not exclusive to Highland Council councillors).

“The decision making process for the Pensions Committee is scrutinised by the Pensions Board whose membership includes employer organisation and member representatives.”

There was also regular scrutiny by an investment sub-committee.