UK Lawyers for Israel (UKLFI) has written to Islington Council’s Pensions Committee ahead of its meeting on 15 September raising serious concerns about Islington Council Pension Committee’ survey of members on proposed changes to the Islington Pension Fund’s investment strategy.

UKLFI warns that the survey was based on misleading information and that adopting the proposals would breach statutory guidance and fiduciary duties.

UKLFI’s letter, dated 31 August 2026, follows the survey conducted in May and June of this year and its consideration by the Pensions Committee on 21 July.

UKLFI says that the survey was accompanied by a number of misleading statements, and that these were compounded by misleading campaign material produced by the Palestine Solidarity Campaign (PSC) and UNISON and distributed to Islington Council staff.

UKLFI warns that the problems have important legal consequences. In particular, it argues that the survey responses do not constitute reliable evidence of informed member views and that reliance upon them would likely result in breaches of fiduciary duties, pension regulations and the Public Sector Equality Duty (PSED).

Islington Fund has not excluded all weapons manufacturers

One of the concerns identified by UKLFI is the statement that: “The Fund has already excluded weapons manufacturers from its active and passive holdings.”

UKLFI says that, taken in context, this would be understood as meaning that the Fund had completely divested from weapons manufacturers. UKLFI explains that this is untrue.

The Fund’s published equity holdings as at 31 March 2026 contained a number of weapons manufacturers, including Daikin Industries, Larsen & Toubro, Mahindra & Mahindra, Minebea, Mitsubishi Electric and Saab. Other companies on the holdings list produce military equipment, including Bombardier, Hitachi, Motorola Solutions, MTU Aero Engines, NEC and Trelleborg.

UKLFI also points to an answer provided by Islington Council on 6 May 2026 to a Freedom of Information request which asked whether the Fund had divested on ESG (Environmental, Social and Governance) grounds from companies manufacturing weapons or components intended for weapons during the preceding three years. The answer was simply: “No.”

According to UKLFI, the misleading statement was particularly significant because the survey also told members (correctly) that non-financial factors could only be taken into account where there was no significant risk of financial detriment to the Fund and there was good reason to believe that scheme members supported the decision. The survey also emphasised that the Fund’s investments had performed well in recent years. The combination would therefore have conveyed the false impression that excluding weapons manufacturers carried no significant financial risk.

Concerns over proposed exclusion of Palantir

UKLFI also expresses concerns regarding the way the survey presented a proposal to exclude investments in the company Palantir.

The survey stated that Palantir’s AI and other technology had been deployed in the current Israel-Palestinian conflict and that the Committee’s present view was that, by analogy with its existing policy on weapons manufacturers, the Fund should not invest in such undertakings.

UKLFI argues first that this presentation was unbalanced because Palantir also supplies technology to the Ukrainian and UK armed forces, among others. UKLFI suggests that the reference to Israel was a kind of dog-whistle, activating antisemitic responses. It further argues that presenting the Committee’s proposed conclusion before asking members for their views risked biasing the responses.

UKLFI next challenges the assertion in the survey that there was unlikely to be any material change in Fund performance from excluding “such undertakings”. It points out that this phrase is ambiguous and would have been understood by many respondents as covering other tech companies whose technology has significant weapons applications, as well as Palantir.

This would catch four of the world’s five largest companies by market capitalisation — NVIDIA, Alphabet, Microsoft and Amazon — which together represent approximately 7.5% of the Fund’s total assets. Divestment from such undertakings would risk significant financial detriment to the Fund.

Questions over use of the UN database

The letter also challenges the consultation’s description of the UN Office of the High Commissioner for Human Rights (OHCHR) database as a “reasonably robust basis” for identifying companies likely to be making a material contribution to serious human rights violations.

UKLFI points out that the OHCHR itself states that the database does not constitute a judicial or quasi-judicial process and does not provide a legal characterisation of the activities or involvement of the listed businesses. It also notes that some of the activities for which companies are listed include providing transport or utilities or using land or water for business purposes — activities which do not necessarily constitute human rights violations.

The letter further raises concerns about the use of unverified information from unidentified sources and the inability of companies to obtain sufficient information about allegations made against them to respond effectively.

UKLFI warns that the number of companies on the database has already increased, from 112 in 2020 to 158 in the 2025 iteration. It argues that future expansion of the database could therefore have a significant impact on the Fund if the Committee adopted a policy of excluding all companies appearing on it.

The letter also highlights the consequence of the requirement to apply such a policy consistently. It notes that numerous major companies have operated in other disputed territories, including Western Sahara and Northern Cyprus, and argues that a policy based on activities such as the use of land and water would exclude many major companies that operate in those territories, resulting in a risk of significant detriment to the Fund.

PSC and UNISON campaigning material

UKLFI separately challenges statements contained in PSC and UNISON leaflets distributed to Islington Council staff.

Among other things, the leaflets stated that “the UN, Amnesty International and many experts have concluded that Israel is committing apartheid and genocide in Palestine.”

UKLFI argues that this was misleading, noting that the International Court of Justice (ICJ) has not determined South Africa’s claim that Israel has breached the Genocide Convention. It also challenges the characterisation of the ICJ’s 2024 non-binding advisory opinion as finding apartheid.

The letter also disputes claims that pension investments were “profit[ing] from these humanitarian crimes”, pointing out that the alleged crimes had not been established and that no evidence had been provided that companies held by the Fund had profited from them.

Only 6.1% responded to the consultation

UKLFI raises particular concerns about the extent of member support for the proposed changes.

The Council made substantial efforts to encourage participation: active members were emailed invitations, UK-based pensioners and deferred members were sent background material and links, and telephone interviews were conducted with under-represented groups. PSC and UNISON also urged members to participate and specifically called on them to “STRONGLY AGREE” with the divestment proposal.

Nevertheless, only 6.1% of eligible members responded, of which a significant minority opposed the proposals.

UKLFI argues that this falls far short of the level of support required before non-financial considerations can properly be taken into account. It cites an Opinion by Nigel Giffin KC for the Local Government Pension Scheme (LGPS) Advisory Board, which stated that there should be a “substantial groundswell of positive support” and that it would be a breach of fiduciary duty to rely on a non-financial factor “if the vast majority of the scheme members simply had no opinion on the subject”.

UKLFI also argues that the respondents cannot be treated as representative of the membership as a whole because they were self-selecting.

Support was not informed

Furthermore, UKLFI says that the misleading information provided in the survey and by PSC and UNISON means that even the responses received cannot reliably establish informed support.

Proposed exclusions and government guidance

A central issue identified by UKLFI is the Local Government Pension Scheme: preparing and maintaining an Investment Strategy Statement guidance issued by the Secretary of State on 29 June 2026. Administering Authorities are required by Regulations to formulate their investment strategies in accordance with this guidance.

The guidance states that an administering authority’s primary obligation is to act in the financial interests of the Fund. It permits non-financial considerations only where they do not involve a risk of significant financial detriment and there is good reason to believe that scheme members support the decision. It also cautions against undue influence from campaign groups whose positions may not reflect members’ views or align with fiduciary responsibilities.

UKLFI points out that the survey does not satisfy the member support condition and that reliance on the false information provided in the survey would be liable to result in non-compliance with the financial detriment condition.

Crucially, the guidance states that an authority’s responsible investment approach should not “specify the individual holdings, managers of geographic zones of investment” or “set exclusions for investments in individual countries, investment styles or companies.”

UKLFI therefore argues that the proposed exclusion of Palantir, as an individual company, and the proposed exclusion of companies because they operate in parts of the West Bank under Israeli administration, are contrary to the guidance.

Equality duty and antisemitism concerns

The letter also raises the Council’s obligations under the Public Sector Equality Duty in section 149 of the Equality Act 2010.

UKLFI argues that the consultation’s focus on Israel and the West Bank, while not applying equivalent criteria to other disputed territories, together with the specific focus on Palantir’s use by the Israeli Defence Forces despite its use by other armed forces, raises concerns under the Equality Act.

The letter argues that boycott campaigns directed against Israel have historically and in the modern period been associated with anti-Jewish hostility, and that the Committee should take these potential consequences into account when exercising its statutory duty to foster good relations and eliminate prohibited harassment.

UKLFI calls for legal issues to be addressed before decisions are made

UKLFI concludes that adopting an investment strategy excluding Palantir and/or companies appearing on the OHCHR database would breach the applicable Regulations and fiduciary duties for several reasons.

These include the conflict with the Secretary of State’s guidance on exclusions, the lack of transparency arising from misleading consultation material, the failure of the consultation to establish sufficiently informed member support, the risk of an erroneous assessment of financial detriment, and concerns regarding the Public Sector Equality Duty.

UKLFI notes that the officers’ report presented to the Pensions Committee on 21 July proposed that legal advice should be obtained before decisions were made. The organisation has asked that its letter and accompanying material be provided to the Committee’s legal and other advisers so that the concerns raised can be properly considered.

UKLFI Chief Executive Jonathan Turner said:

“Pension trustees and administering authorities have a duty to act in the best financial interests of pension beneficiaries and to comply with the statutory framework governing their investment decisions. Those duties cannot properly be discharged on the basis of misleading information or a survey which does not establish informed and sufficiently widespread member support.”

The letter concludes by urging the Council to address these issues before relying on the consultation or proceeding with the proposed exclusions.