A West London council has insisted it is not funding the production of ‘indiscriminate weapons’ after concerns were raised that some of its pension fund is going to a company linked to the supply of arms to Israel.
Councillor Emma Dent-Coad has called on Kensington and Chelsea Council to move its pension fund away from any portfolio that includes Elbit Systems over fears the cash is funding a company producing weapons for use in the Israel-Hamas War.
The independent councillor also singled out General Dynamic Corp and other defence industry firms, which she claims are supplying Israeli forces with equipment.
A recent review by Kensington and Chelsea Council found money being held by investment funds such as Baillie Gifford Global and Adams Street Private Equity had “zero exposure to ‘indiscriminate weapons, weapons of mass destruction or nuclear weapons'”.
However, BlackRock Aquila Life, which holds £14m of the council’s £1.8bn pension fund, was found to have invested in Elbit System and General Dynamic Corp. In August, Elbit announced a $340m (£292m) contract to supply the Israeli Ministry of Defense (IMOD) with ammunition over the next decade, according to a company press release.
A similar deal worth $760m (£585m) was signed in May. A press release at the time said since the start of the Israel-Hamas War, Elbit had experienced “a material increased demand for its products and solutions” by Israel’s Ministry of Defense “compared to the demand levels prior to the war”.
The release continued: “Subject to further developments, which are difficult to predict, the IMOD’s increased demand for the Company’s products and solutions may continue and could generate material additional orders to the Company.” Elbit is an Israel-based military technology company which sells a range of products including drones, its website shows.
General Dynamic Corp’s website shows it sells MK-28 bombs, the supply of which was recently halted by the US over fears they were being used by Israel in densely-populated areas in Gaza, according to a report by Al Jazeera. Kensington and Chelsea’s Investment Committee, which approves its investment strategy, found no exposure to an Israeli chemicals company providing white phosphorus after checks were made due to concerns.
The chemical is used grenades and artillery shells, according to the World Health Organization. The international body also said its use as an incendiary weapon against civilians may violate an international weapons treaty.
Independent councillors Emma Dent-Coad and Mona Ahmed said in a joint statement: “We are grateful that the Investment Committee has taken our demand for divestment seriously, and have read their response thoroughly. However, stating that ‘the portfolio has zero exposure to “indiscriminate weapons, weapons of mass destruction or nuclear weapons”‘ is no consolation when we hear that the United Nations is investigating specific cases of first responders being targeted by lethal drones as they attend to casualties after 2,000lb bombs have been dropped on residential areas.
“We are relieved that one of our fund managers has withdrawn from investment in the phosphorus flame retardant industry, but are concerned that at any point this investment was considered to be in any way ethical.” Both councillors said they will continue to push the council to divest from firms supplying weapons and technology used in Gaza.
Kensington and Chelsea Council has £56,000 invested in Elbit Systems and £964,000 in General Dynamics Corp, according to the review. It also found the Pension Board, which oversees Kensington and Chelsea Council’s pension fund, lacks the authority to alter investment policies.
It said it is committed to being a responsible investor and a long-term steward of the assets in which it invests. The council’s Investment Committee said aside from divesting from firms linked to the Grenfell Fire tragedy, it will continue to maintain a policy of “non-interference” with the day-to-day decision making of investment managers.
The committee must approve an investment strategy in line with guidance issued by the Secretary of State. According to the review, the committee is bound to the Local Government Pension Scheme Regulations of 2016 which states administering authorities are required to include environmental, social, and governance considerations into their investment strategy.
According to the review, the Investment Committee is entitled to make investment decisions, including decisions not to invest in, or divest from, certain companies, based on ethical considerations, provided it has good reason to think that scheme members share its concerns and there is no risk of significant detriment to the fund. The council will meet on Monday (November 4) to discuss their findings.
BlackRock and Elbit Systems have been contacted for comment. General Dynamics said it has no comment to make.
