Campaigners have reacted angrily to goverment plans to make it illegal for public bodies, such as local authorities, to impose political boycotts on products from overseas.
The goverment said any boycotts should be decided at national level. The ban is aimed at stopping public bodies from joining the boycott, divestment and sanction (BDS) movement against Israel in protest over its policies towards the occupied Palestinian territories. Pensions minister, Ros Altmann, said: “We do not believe that it is appropriate for pension trustees to make their own political decisions on boycotting certain investments.”
But the move has been widely condemned as heavy-handed political interference which could make it harder for pension funds to take action on climate change and other responsible investment issues. FlatEarth, an environmental law specialist, said that LGPS funds have a legal duty to protect their members against risky investments, which it said includes fossil fuel companies. ClientEarth chief executive, James Thornton, said: “The law makes it very clear. Measuring and managing financial risk is a legal obligation. This can be achieved by limiting exposure to financially risky fossil fuel investments.”
Other local authority and pension officials said that the government ban on boycotts could limit the ability of pension funds to exclude certain investments on ethical or environmental grounds. They added that there is no evidence that local authority pension funds were making decisions that were harmful to their members and said that the move was undemocratic.