The Avon Pension Fund will continue to invest in aerospace and defence companies after concerns were raised it is funding the production of weapons being used in Gaza.
In a public meeting in Bath on Friday 28th March, the Avon Pension Fund Committee voted to maintain its current approach to investing.
The fund runs the local government pension scheme for 140,000 members across the Bath and Bristol area, who have worked across 450 local employers.
The pension fund invests £18 million or 0.3% of its £6 billion assets in companies involved with defence, which primarily supply NATO partners and the UK government.
Brunel Pension Partnership hold the investments, meaning the pension fund doesn’t directly manage where the money is invested.
The committee considered two possible approaches to the Aerospace & Defence sector, to either stop investing in Aerospace & Defence, or continue to invest in companies which comply with UK and other laws in all sectors, including Aerospace & Defence.
As part of its decision, the committee considered multiple interrelated factors. These included financial returns, local employment in defence, the role of Aerospace & Defence companies in UK & NATO defence, the impact of the current exclusion approach, petitioners’ views on the Israel-Palestine conflict and the committee’s desire to hear the views of the pension fund members.
The committee noted that divestment, and establishing a new fund excluding Aerospace & Defence companies, would have cost around £1.5 million in one-off and ongoing costs, shared across multiple employers in the fund.
The committee also heard that its investments in Aerospace & Defence comply with UK laws and that companies in which the fund invests include Bae Systems and GE Aerospace, which both provide Ukraine with defence products.
The pension fund’s approach to investments in Aerospace & Defence is underpinned by selective exclusions around controversial weapons and heightened risk assessments for companies operating in the sector.
Speaking after the meeting, Councillor Paul Crossley, Chair of the Avon Pension Fund Committee said: “We heard 11 moving and powerful petitions today, and we thank everyone who shared their views.
“We’ve thoroughly reviewed our investments in Aerospace & Defence and explored two practical options. At the end of the debate 10 Committee members voted to continue investing in Aerospace & Defence, and 3 voted to divest.
“Now that the Committee have made a decision in principle, we will consult our members, which will inform the Committee’s final decision. We will report on the member’s views in public as soon as practical in 2025.
“We will also focus on ensuring our existing exclusion policy, introduced in 2024 to protect human rights, continues to be robustly implemented by our fund managers, who will continue to engage Aerospace & Defence companies.
“We remain committed to ensuring our investments address a broad range of environmental, social and human rights issues, and to engaging with our many stakeholders.”
Campaigners have previously warned that millions of pounds in the pension fund is funding arms companies producing weapons being used by Israel in Gaza, alongside investment in companies profiting from illegal Israeli settlements in the West Bank.
Speaking at a protest ahead of a meeting in December 2024, campaigner Dr Eldin Fahmy said: “Avon Pension Fund is funnelling taxpayers’ money into companies aiding or profiting from very serious breaches of international law.”
He added: “This is not just a political choice. It is a matter of good governance for the fund.”
