Millions of pounds from pension retirement pots have been invested in more sustainable companies in a bid to move towards a "greener economy", a councillor has said.

The Nottinghamshire Pension Fund has invested £320m of its £6.1 billion fund into a new sustainable pot.

The 'Global Sustainable Equities Active Fund' has been launched in conjunction with Cheshire, Shropshire and Worcestershire Pension Funds and is worth a total of £1bn.

But Councillor Lee Waters (Ind) said investment in the new fund could be seen as "greenwashing".

The Nottinghamshire pension fund has 145,000 members and covers 300 public service employers including district and borough councils as well as Nottingham Trent University.

The Chairman of the Pension Fund Committee at Nottinghamshire County Council, which looks after the fund, said he was "delighted" at the investment.

But the pension fund, which still has millions of pounds invested in fossil fuel companies, has faced criticism in the past from environmental campaigners.

Mr Kerry previously said that divesting from fossil fuel companies entirely is a "last resort" and said engaging with them to become greener is a priority.

Councillor Eric Kerry, Chairman of the Nottinghamshire Pension Fund Committee said: "It's not just about climate change and renewable energy, it can be anything that helps create a better world in the future – including research, innovative businesses and plant based food companies.

"Broadly speaking we are looking at long-term issues facing the world and investing in companies to provide solutions.

"We had already moved money into sustainable companies and far more than we have in fossil fuels. That will continue as the world moves towards a greener economy.

"It won't happen overnight and there is a lot of disruption right now but it is good that we have achieved what we said we were going to."

Hucknall Councillor Lee Waters has criticised the move claiming it has been done 'for PR purposes'. Image courtesy of Ashfield District Council.

Cllr Waters, pensions spokesperson for the Independent Alliance at the council, who represents Hucknall South, said: "Nottinghamshire's five per cent investment in this fund is done purely for PR purposes.

"Five per cent of monies will be put into this 'branded segregated ethical portfolio'. If this wasn't a publicity stunt – why have they not put more than five per cent in?

"This whole investment looks to me like deliberate greenwashing as they can continue to invest in unethical stocks."