Greenwich Council concedes pension fund investment policy was “unlawful” following Israel divestment challenge: law centre

The challenge comes after the council walked back from a December 2024 commitment to review its pension fund, with a view to reviewing and updating its Responsible Investment policy and to consider the need for divestment.

In September 2025, the Pension Panel voted to put to scheme members a commitment to “integrat[e] human rights considerations into our investment decisions”.

However, campaign group Greenwich Palestine Alliance (GPA) argued the commitment did not go far enough.

It said the approach failed to take into account demands for full divestment from Israel and that this would have had no impact on investment decisions made by the council.

GPA then issued legal proceedings, supported by the Public Interest Law Centre (PILC), against the decision in November 2025.

Its claim argued that Greenwich failed to act in accordance with its constitution, its Compliance Statement and the Local Government Pension Scheme (Management and Investment of Funds) Regulations 2016, in failing to give effect to an earlier decision of the Panel of 9 December 2024, or otherwise failed to give adequate reasons as to why it changed course.

The claim also argued that the council failed to conduct a lawful consultation or consider alternatives to its draft responsible investment policy.

It also challenged the council’s reliance on an Investment Strategy Statement containing an unlawful instruction, which stated that the fund “cannot exclude investments to pursue boycotts, divestment, and sanctions against foreign nations and UK defence industries.”

According to the PILC, Greenwich has now "conceded" that its investment strategy relied on unlawful information, which prevented it from pursuing full divestment from Israel without restrictions.

The council also plans to consult council employees on its draft responsible investment policy, and that consultation will begin at the end of the month and run for four weeks, PILC said.

Lubna Speitan, founding member of Greenwich Palestine Alliance and the claimant in the proceedings, said: “The council’s concession that its policy was unlawful confirms what we have long argued: it always had the power to divest."

The concession comes after Communities Secretary Steve Reed warned that councils boycotting Israeli businesses could face legal action from suppliers who lose money.

Reed said: “Councils should stay out of foreign conflicts and get on with the job of delivering local services.”

Helen Mowatt, Legal Director at the Public Interest Law Centre, said: "For years, councils have wrongly claimed they lack the legal power to divest.

"Greenwich Council itself has operated this unlawful policy since at least 2020, without informing scheme members or the public that it knew the position was wrong until this legal challenge.

“Legally, councils can implement divestment, and this error in understanding must be widely disseminated - a point vital not only for investment panel members but also for community groups, grassroots campaigns, and activists.”

A council spokesperson said: "We continue to share the deep concern about the ongoing situation in Gaza and Israel, where the devastating loss of life has been unimaginable.

“We are unable to comment any further due to ongoing legal proceedings, of which we await the outcome."

Adam Carey