How activists pushed the UK's largest pension megafund to divest from Israel

“How activists pushed the UK's largest pension megafund to divest from Israel Submitted by Sebastian Shehadi on Wed, 05/20/2026 - 16:19 Local government workers were shocked to discover their pensions were being invested in Israeli bonds at the height of the Gaza war. But within a few months the bonds had been quietly sold Campaigners protest outside the South Yorkshire Pensions Authority office in Barnsley in June 2025 (Supplied) Off The UK’s largest public sector pension pool quietly sold its holdings of Israeli government bonds last year following months of activist pressure, Middle East Eye can reveal. Border to Coast Pensions Partnership currently manages nearly £120bn ($160bn) in assets on behalf of around two million people working in local government. In 2024 and early 2025, Border to Coast bought Israeli government bonds worth $29.2m in two purchases made on its behalf by a US -based asset management firm. But it divested from the bonds within months of the second purchase, and has refused to publicly say why. Now, an investigation by MEE can shed light on the human rights concerns, private admissions and the chain of delegation that drove the decision, as well as the murky legal-political landscape that leaves British institutions silent about Palestine but loud on Ukraine. Governments routinely issue bonds to raise money for public spending or to repay debts. For Israel, those sales have been crucial to financing its wars in Gaza , Lebanon and beyond - and appetite for the bonds has remained strong. In January this year Israel raised $6bn from bond sales, with orders totalling $36bn. Largest UK pension fund sells off Israeli assets amid member anger over Gaza Read More » Border to Coast’s divestment is significant because only a few UK institutions have sold Israeli assets over the last few years despite mounting evidence of Israeli war crimes. The most prominent has been the Universities Superannuation Scheme , Britain's largest private pension fund, which had faced criticism and calls for divestment from academic unions. Another pension scheme, the London Collective Investment Vehicle for local government workers in the capital, sold Israeli bonds for £6.7m ($9m) in 2024 but has continued to face activist pressure over other Israel-linked investments. In each case, the institution divested, declined to say why, and moved on - or at the very most cryptically cited “financial risk management”. Yet this pattern appears to suggest that pressure by pro-Palestine activists - alongside Environmental, Social, and Governance (ESG) standards - are impacting institutional investment decisions, even if institutions themselves are still shy to say so. Buying bonds The full scale of Border to Coast’s Israeli holdings - and the timeline of their acquisition as Israel faced accusations of genocide in Gaza - has never been publicly reported or officially confirmed, until now. The findings come from an exclusive dataset shared with MEE that details international purchases of Israeli government bonds between 2024 and 2026, as compiled by Profundo , an Amsterdam-based research firm. Border to Coast’s total purchase of $29.2m in this period made it the largest buyer of Israeli bonds among UK public institutions listed in the dataset. It also ranked as the third largest acquisition by a UK investor of any kind, behind corporate giants Aviva and HSBC. Pension pools are so-called “megafunds” in which assets held by separate pension funds are collectively managed and invested in order to maximise returns and reduce costs. 'We were even more shocked when we realised the bonds had been bought while the genocide was ongoing' - Sue Owens, South Yorkshire divestment campaign Based in Leeds, Border to Coast describes itself as “the UK’s largest pensions asset owner”. It currently manages investments on behalf of 18 regional funds which are themselves also part of the Local Government Pension Scheme (LGPS) for public sector workers. These include some from areas such as South Yorkshire, Tyne and Wear, East Riding and Durham where campaigning for divestment had been building even before the Gaza war. Yet it was only when campaigners sought information about how their funds were being invested that Border to Coast's acquisition of Israeli bonds came to light. “When we found that Border to Coast held Israeli bonds we were appalled to think that pensioners' money was directly helping to fund genocide, apartheid, occupation, incarceration and torture,” Sue Owens of the South Yorkshire Pensions Divest for Palestine Campaign told MEE. “We were even more shocked when we realised the bonds had been bought while the genocide was ongoing.” Campaigners also discovered that, like most funds, Border to Coast relied heavily on external companies to manage its portfolio, meaning that the purchases were actually made through a firm based in Newport Beach, California. This firm, Pimco , is the world's largest active bond manager and a subsidiary of German financial giant Allianz. In September 2025, Pimco bought Israeli bonds worth $15.1m on Border to Coast’s behalf. In March 2025 it bought further bonds worth $14.1m. This was months after the International Court of Justice had ruled it plausible that Israel was committing genocide in Gaza and at a time when members of many local government pension funds were already raising concerns about how their money was being invested. 'Not in our name' In June 2025, the South Yorkshire campaign group presented a 7,500-signature petition calling for divestment at a South Yorkshire Pensions Authority (SYPA) meeting in Barnsley. Protesters outside chanted so loudly that one attendee asked if “it could be recognised that we can't hear half you're saying because of the row coming through these walls”. Owens told MEE: “There is a huge groundswell of support for Palestine in South Yorkshire. We knew from the response we got for our petition that most people would not want their money invested in Israeli bonds.” SYPA spent months demanding answers from Border to Coast, which in turn spent months pressing PIMCO. In South Yorkshire, the pressure continued to build. On 3 September Sheffield City Council passed a unanimous "Not In Our Name" motion , calling on SYPA to take action. At a public meeting the next day Border to Coast chief executive Rachel Elwell acknowledged that she shared SYPA's "frustrations" with Pimco’s lack of transparency and delays, and pledged to "personally take this forward" with Pimco's leadership. But she highlighted too that, unlike Russia’s war in Ukraine, the lack of clear international consensus made divestment from Israel a more complex decision. Andrew Strone, SYPA’s assistant director of investment strategy, added that the UK’s failure to impose sanctions on Israel as it had on Russia made it “difficult to engage in the next level of debate” because of a lack of clarity surrounding government policy. Asset management firm Pimco's headquarters in Newport Beach, California, photographed in 2015 (Reuters) The meeting also discussed Pimco's explanation for its purchase: that the bonds had been bought "based on Israel's then-strong credit rating and economic fundamentals". In response, SYPA members said they were "extremely disappointed". Little wonder the mood of frustration. SYPA could not instruct Border to Coast to sell; Border to Coast could pressure Pimco but could not unilaterally override its decisions. The chain of delegation that made the investment invisible to campaigners, and less visible to Border to Coast and its member funds, was the same chain that made it so difficult to unwind. Pimco did not respond to a request for comment. Selling bonds Border to Coast's bond holdings were finally sold by Pimco in late September. No public announcement was made, and no explanation was given. On 25 September, shortly before the sale, campaigners met with Border to Coast managers at the group’s AGM. One activist who was present told MEE that they had admitted to being "concerned about reputational damage" and did not disagree with the ethical arguments put to them, but "avoided actively agreeing". 'We continue to monitor the impact of the Israel-Gaza conflict on investment portfolios in line with our consideration of ESG issues and our responsible investment policies' - Border to Coast spokesperson It was a telling exchange: the managers appeared sympathetic to the campaign's position behind closed doors, but when it actually divested its Israeli bonds, Border to Coast did so quietly and without any public reasoning. The divestment became more widely known the following month, when campaigners pressed SYPA for confirmation at a Sheffield Council meeting. Asked by MEE, a Border to Coast spokesperson confirmed the sale, but refused to explain whether the decision was influenced by the divestment campaign. The spokesperson did, however, allude to the ESG risks presented by Israeli bonds: “We continue to monitor the impact of the Israel-Gaza conflict on investment portfolios in line with our consideration of ESG issues and our responsible investment policies.” The spokesperson revealed that Border to Coast had engaged a Dutch asset management firm, Robeco , to advise it on human rights due diligence. Robeco is considered a pioneer in offering advice around Israel and Palestine even as many larger players in the US-dominated ESG industry have done the opposite due to pressure from pro-Israel lobby groups. Uncertain legal landscape Border to Coast is the largest pool within LGPS, which is itself one of the largest public sector pension schemes in the UK with around 6.9 million members. So decisions and discussions surrounding its divestment may offer clues to how other institutions are now weighing these issues in the face of activist pressure and what many see as an absence of government leadership and direction. In August, the Palestine Solidarity Campaign sent a paper prepared by barristers at Doughty Street Chambers to LGPS pension funds which warned them of possible legal liabilities over Gaza conflict-related investments. LGPS has a Scheme Advisory Board (SAB) that assists member funds with administration and governance. 'It is not appropriate for local authorities to adopt investment policies that go beyond or differ from UK government sanctions or foreign policy positions' - Alison McGovern, local government minister MEE asked SAB what guidance it was offering pension funds in terms of Israel’s potential violations of international law. SAB stated that it was "not qualified to give a running commentary on the legal consequences of the ongoing conflict in Gaza”. It said it had written to Local Government Minister Alison McGovern in October, asking for guidance on whether holding Gaza conflict-related investments creates specific legal liabilities for pension funds. In that letter it noted pointedly that a previous secretary of state had communicated his views on the appropriateness of investments in Russia following the invasion of Ukraine, and asked why Gaza should be any different. SAB also referred MEE to a January 2025 legal opinion by barrister Nigel Giffin KC, which offered pension funds a more comfortable framework to that set out in the Doughty Street paper. In Giffin’s view, ethics and human rights can influence investment decisions, but only if there is no significant financial risk and scheme members would broadly support it - something close to consensus. By this measure, while a petition of 7,500 signatures might appear meaningful, a pool serving two million members could always ask: have you heard from the rest? Giffin also noted that funds have no legal obligation to act outside their triennial review cycle, giving them a defensible basis for delay even where the ethical case was strong. The discrepancy between the positions taken by Giffin and Doughty Street reveals a legal landscape pulling in two directions. On one side, Doughty Street argued that inaction was itself potentially unlawful under international law. On the other, Giffin provided pension funds with a framework in which caution and delay were legally defensible. And at the centre of that landscape: a government, with the power to issue clarifying guidance, dragging its feet. Government letter SAB’s letter to McGovern was sent on 13 October. Last week, one day short of seven months later, McGovern replied. The government’s response offered clarity of a kind - but not the kind campaigners were hoping for. McGovern wrote that decisions on boycotts, divestment and sanctions were “matters of UK foreign policy and are for central government, not local authorities. “It is therefore not appropriate for local authorities to adopt investment policies that go beyond or differ from UK Government sanctions or foreign policy positions.” How Norway, home of the Nobel Peace Prize, profits from war in Gaza Read More » With no sanctions on Israel in place, the message appeared to be: hold your position and do not divest. But McGovern added that authorities were not prevented from changing investment strategies “for other reasons, particularly where required to meet their fiduciary duties” - a caveat that appears to leave room for divestment decisions if framed in financial rather than political terms. Notably, the letter acknowledged “the pressures applied by some campaign groups” - rare recognition at ministerial level that pro-Palestine activism has become a real and consequential force on pension fund decision-making. Border to Coast's selloff of Israeli bonds came as pressure on financial institutions in the UK and Europe was intensifying more widely. In August, Norway’s Government Pension Fund Global divested from 11 Israeli companies and subsequently excluded Caterpillar and five Israeli banks over their links to settlements and the destruction of Palestinian property. In September, the Central Bank of Ireland stepped back from approving Israeli bond prospectuses. In the same month in Denmark, an academics’ pension fund formally excluded Israel and Israeli state-controlled companies. Despite Border to Coast’s bond divestment, the group remains invested in at least three companies on the UN database of businesses operating in illegal Israeli settlements: Airbnb, Booking.com and Bank Leumi. Border to Coast told MEE that, since last year, it has been actively engaging with those companies with regards to ESG concerns. The South Yorkshire divestment campaign continues to press for further divestment. Business News Post Date Override 0 Update Date Mon, 05/04/2020 - 21:19 Update Date Override 0

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