Agenda item

Councillor Johnson (as Chair) advised that he had agreed to receive a deputation at the meeting from Sheila Guhadasan representing the Brent & Harrow Palestine Solidarity Campaign (PSC).  The Chair welcomed Sheila Guhadasan along with other representatives from the Brent & Harrow PSC who were attending in support.  Members were advised that the deputation was seeking an update on the progress with the Council’s review of investments under the UN’s Principles for Responsible Investment following the presentation of their petition divesting for Palestine at the Full Council meeting in September 2024 and subsequent deputation to the Sub Committee in February 2025.

In addressing the Committee, Sheila Guhadasan began by congratulating Brent Council on their recent decision to twin with Nablus, stating that she was pleased to see Brent receiving their first visitors from Nablus that same week.

In highlighting the ongoing situation in Gaza and the previous call on the Council to consider divesting from companies complicit in Israel’s stance against the Palestinians, the Sub Committee was reminded that the original petition submitted in support to the request made by the PSC had attracted over 2000 signatures calling on the Council to recognise what were felt to be their legal and moral responsibilities and join the growing number of Councils, public bodies and institutions divesting for Palestine.  Referring to the six divestment calls for action presented as part of the previous deputation, the Sub Committee was advised of the growing support and public commitments being made by other local authorities and companies (including those in the retail sector) towards divestment, with surveys showing that public support for such action also remained high.

In terms of wider action, it was pointed out that the Brent and Harrow PSC had also been working with Trade Unions in support of their divestment campaign, including Brent National Education Union and UNISON as a recognised partner, with the Council also called upon to fully commit to the process including consideration of the investments held in the Local Government Pension Fund.  In recognising the move toward pooled funding arrangements with the London CIV the Sub Committee was also urged to ensure the necessary assurances were sought on the ethical criteria of the investment funds operated through the CIV to ensure zero complicity in what were regarded (by the deputation) as the genocidal acts being committed by Israel in relation to their occupation of Gaza and the West Bank.  Similarities, in this respect, were drawn to the stance which had previously been taken by the Council in seeking to divest from companies implicit in the apartheid regime in South Africa.

Highlighting that the deputation represented a shared call for ethical divestment by many, including environmental campaigners, Sheila Guhadasan ended by outlining what she felt to be the clear moral and legal basis for the specific actions which had been identified.  Having referred to the work being undertaken with Brent National Education Union in support of the divestment campaign, Sheila Guhadasan advised that she had hoped to be joined in making the deputation by Lucy Cox from Brent NEU representing Brent Trades Council with the Sub Committee advised that she had unfortunately been delayed in getting to the meeting and was therefore not able to attend.  The support expressed by Trade Unions in support of the PSC divestment campaign as a recognised partners of the Council was, however, once again outlined.

In summing up, Sheila Guhadasan felt it important to recognise the opportunity now available for the Council in seeking to support the divestment campaign in advance of the moved to the pooled LGPS funding arrangements to demonstrate the importance in the way its values relating to equality, diversity, inclusion, justice and community cohesion were being upheld.

Having thanked Sheila Guhadasan for presenting the deputation, Councillor Johnson (as Chair) in highlighting the value placed on the engagement of communities across the borough took the opportunity to acknowledge the significance of the issues brought forward.  It was pointed out that a full written response had been provided separately to Brent & Harrow PSC on the issues raised as part of the previous deputation and, recognising the important of the concerns highlighted regarding the Pension Fund’s investments, the Chair took the opportunity in responding to the additional comments made to outline the Fund’s current position and ongoing work regarding Brent’s approach to responsible investment.

In recognising the depth of feeling within communities across the borough around what was acknowledged as the ongoing and deeply concerning conflict in the Middle East given the devastating humanitarian consequences, loss of civilian life and suffering Councillor Johnson began by outlining the Council’s support in seeking a lasting and peaceful resolution to the conflict, grounded in international law, human dignity, and mutual recognition.  In terms of the issues relating to Brent’s Pension Fund the opportunity was taken to acknowledge how seriously the Council took the ethical concerns raised recognising the moral dimensions of public investment and the power of responsible financial stewardship.

At the same time, however, the Funds statutory responsibility to its 22,000 members (including current and former teachers, social workers, and council staff who had served the borough for many years) was also highlighted along with the Council’s fiduciary duty to invest in the best interests of scheme members and employers.  The need to meet these obligations had required the adoption of a diversified approach to investment to ensure long-term financial sustainability with the Fund it was pointed out, in discharging their responsibility, legally bound (as an overriding principle) to manage the investment portfolio in a way that prioritised the financial security of members' pensions which they had been proud to safeguard over many years.

Moving on to focus on the principles of divestment, the Chair felt it important to highlight that the Fund did not invest directly in companies based in Israel or the Occupied Palestinian Territories, nor in arms manufacturers. The investments made were through pooled funds, including passive and tracker funds, and via London CIV (LCIV).  Whilst these structures were favoured due to low investment manager costs they would, due to the nature of the investment held, also limit the Fund’s ability to divest from specific companies.  As had been recognising during the deputation, the Chair also referred to the impact arising from the Government’s recent proposals under “LGPS Fit for the Future” which would require a majority of Fund assets to be managed through London CIV by March 2026 under pooled arrangements further reducing the scope for bespoke investment strategies.  As such, he advised, no immediate changes in the investment strategy were planned pending suitable options becoming available although an assurance was provided that the Fund remained committed to responsible investment with confirmation provided that all investment managers were signatories to the United Nations Principles for Responsible Investment (UNPRI), which promoted the integration of environmental, social, and governance (ESG) factors into investment decisions.  In reminding members and the deputation that the Scheme Advisory Board (SAB) statement published in September 2024 had stated that administering authorities may only consider non-financial factors where there was no significant risk of financial detriment and where there was broad support among scheme members, a commitment was made that the Fund would continue to review its investment strategy in light of evolving guidance, advice and available options.

In recognising that divesting from individual firms would require exiting entire pooled mandates, a step back which it was known the government would not support, the Chair advised that the Council’s approach towards responsible and ethical investment did, however, remain a core priority for the Fund and one that would also be made clear to the LCIV as part of the move towards the new “Fit for Future” arrangements.

Taking account of the context of the above alongside ongoing international conflicts, the Chair recognised the fund faced a difficult balancing act, honouring its fiduciary duties to protect pension benefits, respecting the diverse views of its membership, and considering the ethical concerns raised by residents. As these were not straightforward matters, no simple solutions were seen as available to Brent although he once again assured the deputation of the Councils continued commitment to a process of ongoing engagement.  As part of this process, he pointed out the Council would also continue to work collaboratively with other London boroughs, engage with the LCIV, and remain open to exploring responsible investment approaches that reflected the Fund’s financial responsibilities and values.

In once again assuring those in support of the deputation that the points raised both during the meeting and as part of previous representations, would remain part of Brents thinking as national policies and investment options evolved Councillor Johnson concluded by thanking Brent & Harrow PSC for their engagement with the Council, valuing the respectful and constructive way they had sought to highlight their concerns and seek an update on progress.