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The Avon Pension Fund sticks to its guns on defence

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1 Apr 2025

The scheme has decided to keep investing £18m in the sector.

The scheme has decided to keep investing £18m in the sector.

The Avon Pension Fund has literally stuck to it guns when it comes to its investments, after a public meeting in Bath the fund committee voted to keep its approach of investing in aerospace and defence. 

Avon Pension Fund runs the local government pension scheme for 140,000 members across Bristol and Bath and invests £18m, or 0.3% of its £6bn assets, in companies involved with defence, which primarily supply NATO partners and the UK government. 

The pension fund doesn’t manage the investments directly. Brunel Pension Partnership holds the investments on the fund’s behalf in highly diversified funds which invest in many different companies globally. 

The committee said it considered two possible approaches to the aerospace and defence sector. One, to stop investing in aerospace and defence; and two, continue to invest in companies which comply with UK and other laws in all sectors, including aerospace and defence.

It chose the second option, with 10 committee members voting to continue, and three opting to divest. 

As part of its decision, the committee said it considered multiple inter-related factors: financial returns, local employment in defence, the role of aerospace and defence companies in UK and NATO defence, the impact of the current exclusion approach, petitioners’ views on the Israel-Palestine conflict and the committee’s desire to hear the views of the pension fund members. 

The fund committee noted that divestment – and establishing a new fund excluding aerospace and defence companies – would cost the fund £1.5m in one-off and ongoing costs, shared across multiple employers in the fund. 

The committee also heard that its investments in aerospace and defence comply with UK laws and that companies in which the fund invests include Bae Systems and GE Aerospace, which both provide Ukraine with defence products. 

The pension fund noted its approach to investments in aerospace and defence is underpinned by selective exclusions around controversial weapons and heightened risk assessments for companies operating in the sector.

 Speaking after the meeting, councillor Paul Crossley, chair of the Avon Pension Fund Committee, said: “We remain committed to ensuring our investments address a broad range of environmental, social and human rights issues, and to engaging with our many stakeholders.”

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