Agenda item

            The Members of the Committee were reminded that the Council, at its meeting on 1st June, had passed the following motion, which had been proposed by Councillor Murphy and seconded by Councillor Walsh:

"This Council notes that recent weeks have seen the most serious escalation of violence in Israel and the occupied Palestinian territory since 2014, with a tragic impact on innocent civilians and loss of life, including the deaths of over 60 children, and condemns the indiscriminate targeting of civilian populations and infrastructure and the disproportionate impact which this has had, particularly in the Gaza strip.

The Council recognises that the displacement of Palestinian communities in East Jerusalem and across the West Bank and the expansion of illegal Israeli settlements undermines the prospect of peace, not just in recent weeks but over decades, and represents a flagrant violation of international law.

Therefore, the Council will write to the Local Government Pension Scheme to seek, as part of its responsible investment strategy, that it will begin the process of divesting from any Israeli State owned company or private company involved in the occupation and the violation of Palestinian human rights. This will include any companies listed by the United Nations as operating in these illegal Israeli settlements within the occupied Palestinian territories.

The Council will also ask that NILGOSC carry out its own due diligence into any other companies which are not included on this list but are known to be involved in or with these illegal settlements.

Finally, the Council will ask that the divestment process is time bound to a period of 12 months from when NILGOSC makes those companies involved first aware of the complaint and intention to divest.”

            The City Solicitor confirmed that a response to the motion has been received from Mr. D. Murphy, the Chief Executive of NILGOSC.

            Mr. Murphy had begun by stating that it was NILGOSC’s policy not to divest (or invest) for political reasons and that all investment decisions were made on investment grounds. However, fund managers were required to take environmental, social and corporate governance matters into account.

            He had pointed out that the NILGOSC pension fund was the largest in Northern Ireland and was valued at £9.79bn at 31st March 2021, with investments being made in a range of asset classes across the world. NILGOSC’s overriding obligation was to act in the best interests of the Fund’s beneficiaries. In this fiduciary role, NILGOSC believed that environmental, social and corporate governance issues could affect the financial performance of investments. Accordingly, these factors should be taken into account when managing the Fund’s assets, subject to the overriding fiduciary duty to maximise the financial return on investments.

            He had gone on to explain that NILGOSC had adopted the United Nations Principles of Responsible Investment as a means of publicly demonstrating this approach and that it expected the companies in which it invested to comply with best practice, in terms of corporate governance.

            He had added that NILGOSC collaborated with other like-minded investors and groups to engage with companies, industries and countries in which it invested, with the aim of improving levels of corporate governance, where needed.

Mr. Murphy had then stated that NILGOSC delegated the selection of investments held to its fund managers and did not impose any investment restrictions in relation to social, ethical and environmental issues. NILGOSC had instructed its active fund managers to take account of environmental, social and corporate governance considerations, provided the primary financial obligation was not compromised.

He had concluded by stating that NILGOSC ensured that the fund managers whom it appointed were capable of appropriately considering environmental, social and corporate governance issues when making investment choices and that it monitored the managers’ action in this area. It worked with the fund managers and the investment sector to ensure that sufficient data was available to aid effective decision-making.

After discussion, it was

Moved by Councillor McLaughlin,

Seconded by Councillor Murphy,

      That the Committee agrees to recommend that, in accordance with the Council decision of 4th May, the Chief Executive exercise her delegated authority to invite Mr. Murphy to attend a future meeting in order to discuss NILGOSC’s divestment policy and principles in greater detail.

            On a vote, twelve Members voted for the proposal and six against and it was declared carried.