In Short

• Avon Pension Fund launches survey of 20,000 members to get views on investments in aerospace and defence companies.
• Current defence investments total £18 million (0.3% of the fund), managed by Brunel Pension Partnership.
• Divestment debate influenced by conflicts, including Israel-Gaza, Ukraine, and environmental and human rights concerns.

The Avon Pension Fund, worth £5.8 billion, is asking its members what they think about its investments in aerospace and defence companies.

This comes on the heels of several months of pressure from members who have been pushing the fund to reconsider its investment policy. The survey, which will be sent to 20,000 members, will ask whether Avon should continue investing in companies like BAE Systems, Boeing, Northrop Grumman, and General Dynamics.

At present, the fund has around £18 million (about 0.3% of its total investments) invested in defence companies. These investments are managed by the Brunel Pension Partnership. If the fund were to withdraw from these companies, it could cost around £1.5 million to make the necessary changes to its portfolio.

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The pressure to divest from defence companies has grown, with some members pointing to the Israel-Gaza war, the war in Ukraine, and conflicts in Sudan and the Democratic Republic of Congo as reasons for cutting ties. Some also argue that the environmental impact of conflicts and the defence industry should be considered when deciding on investments.

However, there are also reasons being put forward for maintaining these investments. For example, some of the defence companies provide materials that support Ukraine’s defence against Russia, which is viewed positively by some members. Also, BAE Systems is a major employer in Bristol, a region directly linked to the pension fund, meaning local jobs could be affected by divestment.

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The pensions committee decided in March not to divest immediately, but instead to ask members for their views through a survey. The results will be considered along with legal and financial factors before a final decision is made. The committee also stressed that the fund already has an exclusion policy introduced in 2024 to address human rights concerns, and it will continue to apply this policy when managing investments.

Ends/

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Source: Pensions Expert