Councillors backed changes to the Berkshire Pension Fund’s Responsible Investment (RI) policy, recognising that the fund’s investments into companies with links to conflict affected areas could need ‘enhanced due diligence’.
The Berkshire Pension Fund is managed by the Royal Borough and administers the Local Government Pension Scheme.
It is responsible for managing the pension of thousands of council employees across Berkshire.
At a September Berkshire Pension Board committee meeting, councillors provisionally approved the RI policy but raised concerns about the investments being made into companies linked to Israel’s war in Gaza.
At the time, Jo Thistlewood, the head of the pension fund, described the investments into multinational companies with links to Israel as ‘very small’.
Councillors argued that if the financial loss was minimal, the fund should divest. They asked for further changes to be made to the policy, to make the fund’s position around conflict clearer.
In a written question submitted to Ms Thistlewood for the board’s meeting on Monday (December 8), Sue Sibany-King, from the East Berkshire’s Palestine Solidarity Campaign asked what the barrier was stopping the fund from divesting.
Ms Sibany-King said: “Many local people, including many scheme members, would prefer no amount of investment in companies aiding the construction of Israel’s illegal settlements in occupied Palestine territory and genocide in Gaza.”
At the Town Halll meeting, a report including the changes to the Responsible Investment (RI) policy was presented to councillors.
Ms Thistlewood said that an additional ‘responsible investment belief’ had been added to the policy titled ‘Conflict-Affected and High-Risk Areas’, with specific circumstances to be looked into on a case-by-case basis.
The report said: “The fund recognises that companies operating in conflict affected and high risk areas can face heightened operational, reputational, legal, and financial challenges, which can pose material risks to the value of the fund’s investments and reputation.
“Where we have material concerns on this front, we will raise them with Local Pension Partnership Investments (LPPI) and discuss what measures might be appropriate within the specific context and circumstances.”
It added that LPPI, who oversee the day-to-day managing of the fund, will assess if ‘unfolding geopolitical events’ will need ‘enhanced due diligence’.
Councillor Julian Tisi (Lib Dem, Eton and Castle) said: “I think [the changes] are definitely an improvement and I’d be happy to support this [policy].
“It would be good, outside of the policy, to then consider what we are doing about the specific situations around the world.”
In the report, conflicts across the world have also been identified as a ‘high risk’ for the pension fund, because of the ‘volatility and negative sentiment’ in global investment markets.
Other ‘high-risk’ areas include the fund’s inability to recruit and keep experienced staff within various pension fund teams despite recruitment campaigns.
West Berkshire Cllr Jeremy Cottam (Lib Dem, Thatcham North-East) was also concerned about how the the fund is managing the negative impacts related to climate change, which remained a red risk.
Ms Thistlewood said: “Berkshire Pension Fund on its own cannot do anything within its investment strategy to change the climate change risk. We can mitigate it by ensuring we are looking at environmental opportunities.”
Climate change is one of the fund’s priorities according to the report, to try and control its impacts. Other priorities include pollution, biodiversity, affordable housing and local investment.
