Tower Hamlets Council's Pensions Committee has resolved to divest from companies violating human rights, basing its decision on the UN Office of the High Commissioner for Human Rights (UNOHCHR) database. This move follows a motion passed by the Full Council and was confirmed at the committee's meeting on Tuesday, September 15, 2026.
The committee reviewed reports analysing the pension fund's holdings against several international databases, including the UNOHCHR list. According to findings by Marsh, a targeted exclusion based on this list would affect approximately 0.4% of the index, with a potentially minimal impact on expected returns. However, if this prediction proves inaccurate and the fund earns less than anticipated for funding purposes, the funding level could deteriorate, potentially leading to increased employer contribution rates in the long term.
The Pensions Committee has confirmed its policy direction to progress a targeted exclusion and divestment approach for companies within the scope of the UNOHCHR database. London CIV has been requested to provide a detailed implementation plan, including a timetable, expected transaction costs, tracking implications, and the treatment of pooled vehicles. The meeting information does not specify an exact completion date for the divestment.
In addition to direct divestment, the committee has explored alternative strategies. London CIV has been asked to model credible options for other lists, which include 'enhanced engagement and escalation, revenue- or activity-based thresholds, watchlists, targeted exclusions supported by verified evidence, and mandate-specific approaches.' This indicates a comprehensive consideration of various methods to address human rights violations within the pension fund's holdings.
The committee will rely on the detailed implementation plan from London CIV to ensure ongoing monitoring and compliance with the divestment policy. This plan is expected to outline processes for handling additions and removals from the UNOHCHR list. Any enduring exclusion framework will need to be formally incorporated into the Fund's Investment Strategy Statement (ISS) and Responsible Investment (RI) policy.
The report emphasised that while the Full Council can express policy positions, investment decisions for the Pension Fund must be made by the Pensions Committee, acting in the best interests of its members and adhering to statutory Local Government Pension Scheme (LGPS) governance arrangements. The committee's decision-making process is detailed in the Public reports pack [https://democracy.towerhamlets.gov.uk/documents/g17802/Public%20reports%20pack%2015th-Sep-2026%2018.30%20Pensions%20Committee.pdf?T=10].
While there are no immediate material financial implications to the Council, investment performance has long-term financial implications for employer contributions. Costs associated with advice, data licensing, mandate changes, and asset transition will be met from the Pension Fund.