West London council urged to divest from arms companies says it will keep everything 'under review'

A West London council urged to withdraw its pension fund investments in arms and weapons companies has said it will keep everything ‘under review’. Hammersmith and Fulham Council however pulled short of committing to divesting from specific organisations following a report recommending against such action.

A growing number of local authorities have been under pressure to move investments from companies connected to or directly involved in the production of weapons, in particular since the start of the war between Israel and Gaza

A review of Hammersmith and Fulham Council’s pension fund, which at June 30 this year was valued at £1.37 billion, found the exposure to organisations involved in arms across its portfolio was 3.5 per cent. These included £470,000 in BAE Systems, £256,000 in Northrop Grumman, and £342,000 in Rheinmetall.

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Councillors on the Pension Fund Committee were last night (Tuesday, November 26) recommended by officers not to take any divestment action. A report prepared for members outlined how the fund has a fiduciary duty to deliver strong returns alongside wider regulatory requirements.

It added officers had found no evidence of its asset managers breaching international laws, and that it is ‘not appropriate’ for political preference to take precedence over its fiduciary duty.

“The Fund will continue to encourage positive change on all ESG (Environmental, Social and Governance) factors, while officers will continue to engage with the investment managers to monitor investment performance, including consideration of human rights, international law and other ESG issues,” officers wrote.

At last night’s meeting, local resident David Wilkins, who had written to the committee chair Cllr Ross Melton on the matter earlier this year, said a number of other councils in London are already dealing with this issue.

He referenced the case of Waltham Forest Council, which this summer said it will withdraw the £773,000 its pension fund had invested in firms linked to arms producers.

Mr Wilkins said: “You may find yourself as something of an outlier as time goes forward and I think that may not be a good position for the council to be in.”

He added the issue is not simply a financial one but also has moral implications. “Will Hammersmith and Fulham pension fund take a moral stand on this and at least say for the time being that they’re planning to move all investments out of companies that have been connected to arms?,” he asked.

Cllr Melton said the committee would not make such a commitment during the meeting, though confirmed the question will be considered by members as a potential priority within the fund’s investment principles.

Cllr Adam Lang added the committee is not complacent around issues such as geopolitical events and assured Mr Wilkins everything will be kept ‘under review’. “Ethics is key to all of us in this room,” he said.

Concerns were recently raised about neighbouring Kensington and Chelsea Council’s pension fund. Independent councillor Emma Dent-Coad called on the local authority to move its investments away from companies such as Elbit Systems, an Israel-based defence company.

The council said it is committed to being a responsible investor, and that other than ensuring it has no firms linked to the Grenfell Fire tragedy in its portfolio, it will maintain a policy of ‘non-interference’ with the day-to-day decision making of investment managers.

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