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Hastings & Rye PSC campaigning for pension fund disinvestment in the town centre.

Divestment success “major victory” says local PSC

East Sussex Pension Fund has divested from Elbit, an Israeli arms manufacturer, in what Hastings & Rye Palestine Solidarity Campaign claims as a major victory for campaigners. There was no progress however towards persuading the fund to withdraw its investments in fossil fuel companies. Nick Terdre reports.

The news of East Sussex Pension Fund’s (ESPF) divestment from Elbit emerged in a lengthy answer given by the chair of the East Sussex pension committee, Cllr Gerald Fox, to questions submitted to East Sussex County Council’s full council meeting on 9 February. The fund, he wrote, “has no exposure to Elbit Systems.”

This represents a change from December when Cllr Fox confirmed that the fund did hold an investment in Elbit. According to research by the PSC, the investment was of the order of £25,000.

Cllr Fox was at pains not to take any credit for the disinvestment. The fund “does not directly invest in any specific company,” he wrote, “instead it invests through a combination of holdings in passive index funds and active fund managers.” It is the fund managers who decide which companies are included on the investment list.

Israel’s largest private arms manufacturer, Elbit was a key target for Hastings & Rye PSC. “It produces a range of weaponry deployed by the Israeli occupation army to murder or maim Palestinians,” it said in a press release. “Elbit Systems’ Hermes 900 drones were among Israel’s drones that murdered 164 Palestinian children in Gaza in 2014.”

Flood of letters

Divestment from Elbit followed months of pressure from fund members and campaigners for Palestinian human rights; since May 2020 ESCC has been “flooded” with more than 60 letters calling for this move, Hastings & Rye PSC said.

According to Cllr Fox, as of  31 December the fund still had exposure to four companies included on the UN’s list of companies complicit in violation’s of Palestinian human rights. The campaign group would like to see these investments withdrawn too, calling on the fund “to ensure all companies complicit in Israel’s violations of international law are excluded from their full portfolio.”

A High Court ruling last May provided a fillip for PSC’s divestment campaigning.

PSC’s divestment campaign has been stepped up since it won a High Court ruling  last May overturning a government ban on local pension schemes making divestment decisions contrary to UK defence and foreign policy.

It noted that the Local Authority Pension Fund Forum (LAPFF), to which most such funds, including ESPF, belong, is now engaging with companies on the UN Human Rights Office’s list of businesses active in Israel’s illegal settlements, and called on ESPF to end its investments with four such companies to which, according to Cllr Fox, it still has exposure.

No progress on divestment from fossil fuel companies

Meanwhile Divest East Sussex is no nearer its goal of persuading the fund to divest from fossil fuel companies. Again large numbers of those in favour of such a move submitted questions asking whether the committee accepted that “keeping global warming to well below 2°C, pursuing 1.5°C (the central goal of the 2015 Paris Climate Agreement), would require the rapid alignment of the big fossil fuel companies with a 1.5°C pathway.”

As on previous occasions he did not answer the question, instead Cllr Fox spelled out the pension fund’s commitment to a policy of engagement with fossil fuel companies in an attempt to persuade them to change their ways.

“The Fund’s engagement policy is supportive of this alignment and we are actively trying to influence companies that are not aligned with the Paris agreement to ensure they are on a suitable transition pathway,” he said.

A Divest East Sussex spokesperson said, “Councillor Fox knows perfectly well that catastrophic global warming cannot be averted without the rapid alignment of the big fossil fuel companies with a 1.5°C pathway.

“But he won’t admit this because he refuses to stop investing local people’s pensions in these companies – despite the fact that not a single one of these companies is anywhere near aligning with such a pathway.

“It’s time for East Sussex County Council to end its climate hypocrisy and divest the East Sussex Pension Fund from the fossil fuel companies that are taking us all over the edge of the climate change cliff.”

The same question has been submitted 342 times to the last three meetings of the full council.

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Posted 11:45 Monday, Feb 15, 2021 In: Campaigns

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