Hackney Greens’ Israeli ‘genocide’ divestment pledge hits legal hurdles

Hackney’s new Green Party led council is faces claims it is already encountering administrative and legal gridlock over its election pledge to immediately divest the borough’s pension fund from companies allegedly complicit in “genocide” in Gaza.

At last month’s local elections, Zack Polanski’s Green Party won a commanding majority of 42 seats in the North London borough, centering their campaign on a pledge to “Cut all Council Ties with Israel’s Genocide in Gaza.”

Before the Greens took office, Zoë Garbett—now Hackney’s mayor—and her colleagues repeatedly called on the previous Labour administration to support “immediate unilateral divestment” from companies profiting from Israel’s military operations and occupation.

However, Town Hall insiders note that the Green administration’s flagship ethical investment policy directly conflicts with the strict regulatory frameworks of the London Collective Investment Vehicle (London CIV), which manages the pooled pension funds of 32 London boroughs.

Under recent Local Government Pension Scheme (LGPS) reforms, individual borough councils can no longer quickly divest from specific equities on their own.

The LCIV requires a “critical mass” of agreement among member boroughs to trigger blanket asset exclusions, creating a significant bottleneck for localised Green policies.

Because assets are pooled across all 32 London local authorities in the LCIV mega-fund, individual councils cannot unilaterally block specific stocks. To exclude assets based on ethics, geopolitics, or human rights, a substantial coalition of member funds must demand the same restriction.

An opposition Labour member commented: “Mayor Garbett campaigned on promises of swift, radical action, but we are now seeing the inevitable pivot into reality.

“You cannot run a multi-million-pound public pension fund on emotional rhetoric when you are legally and structurally bound to a regional investment pool.”

Despite these challenges, Mayor Zoë Garbett and the Hackney Greens continue to insist that ethical divestment is a priority. They have met with local Palestine Solidarity Campaign activists to reaffirm their commitment to pulling pension fund capital from companies complicit in human rights abuses, international conflict, and fossil fuels.

Another immediate challenge for Garbett is determining the true level of exposure within the Hackney Pension Fund portfolio to companies considered problematic.

Formal reports from the Hackney Pensions Committee estimate the fund’s exposure to companies listed on the UN Human Rights Council (UNHRC) database for operating in the Occupied Palestinian Territories at roughly £3.5 million—just under 0.2% of total assets, entirely within passive, multi-asset pooled investments.

Campaigners from the PSC argue the true figure is much higher—closer to £30 million. Legal experts warn that if this is accurate, removing up to £30 million in global assets would require unwinding complex, diversified index funds, potentially resulting in severe financial penalties and jeopardising the council’s fiduciary responsibilities.

Meanwhile, Hackney Greens’ ability to challenge the LCIV’s stance on divestment remains limited. Four boroughs—including Waltham Forest and Tower Hamlets—have already passed council motions or changed investment strategies to restrict investments in fossil fuels, arms, or entities violating international law. Other boroughs, such as Lewisham and Barking and Dagenham, have taken similar steps but face the same legal hurdles as Hackney.

Ahead of the first Hackney Pension Committee meeting this week, Jewish News understands the Green administration continues to insist that divestment is a priority to be addressed swiftly.

However, they note that Pension Committee members must first complete training and induction sessions.