UKLFI has written to the Chairs of all the Local Government Pension Scheme (LGPS) Committees in England to correct the inaccuracies and misconceptions that were contained in a letter sent by the Palestine Solidarity Campaign (PSC).

On 13 May 2020 PSC sent a letter to LGPS Committee Chairs, attempting to exploit the recent majority decision of the Supreme Court which held that some of the guidance given by Ministers exceeded their powers.

The PSC letter accused Israel of “grave violations of Palestinian human rights and international law” and asked the pension committees to “act to ensure adequate screening and due diligence procedures are in place to guarantee the scheme is not complicit in Israel’s violations of international law”.

UKLFI’s letter reminds the recipients that

1. Scheme administrators must act in the best interests of their members, not in the best interests of PSC. PSC is an unregulated company and is not a scheme member.

2. The PSC letter contains a number of claims regarding the State of Israel that are inaccurate in fact and in law. These claims do not constitute reliable information or independent research and no reasonable scheme administrator or investment manager could reasonably rely on them when making investment decisions.

3. The decision of the Supreme Court did not change the common law regarding the inclusion of non-financial consideration in the investment management process, which are that non-financial considerations can only be taken into account if this would not involve significant risk of financial detriment, and the scheme administrator must have good reason to think that scheme members would support the decision.

UKLFI also noted that the PSC letter was signed by Ben Jamal as “Director”, but according to the Companies House database he ceased to be a Director on 16 July 2016.

PSC’s actions appear to be a concerted effort to move the market based on false or misleading information which is a matter for the Financial Conduct Authority.

Jonathan Turner, chief executive of UK Lawyers for Israel commented:  “This appears to be a brazen attempt to exploit environmental, social and governance (ESG) policies, adopted as part of an investment management mandate, as a weapon for activists with no interest in the scheme.

If scheme administrators and scheme members are acting as a delivery system for PSC propaganda, this threatens the integrity of the markets and the investment management industry.”

UKLFI previously wrote in 2018 to several Scottish local government pension funds, reminding them of their obligations to all beneficiaries and warning them against reliance on information provided by organisations that are not independent research providers.