SHETLAND Islands Council (SIC) will ask its fund managers to reconsider its investments in Israel.
It comes after a push from depute leader Gary Robinson at a meeting of the full council last week.
Councillors discussed a report focused on a review of equity allocation.
Some changes were approved in the SIC’s investment strategy, such as the council’s 70 per cent equity allocation being split between 40 per cent passive equities and 30 per cent active.
The council hires fund managers to invest its reserves – which at the end of February were valued at £392 million – in a bid to gain returns.
During Wednesday’s meeting Robinson said he had enquired with the SIC’s finance manager in January about what investment funds were held in Israel.
He said the answer was that over £300,000 is invested via fund managers BlackRock, and more than £250,000 through Baillie Gifford – only a very small proportion of the overall value.
Robinson asked if that was still the case, and if so, if the “reshuffle” from the review of equity allocation might offer an opportunity to divest from these funds.
The answer from investment advisors was that it is technically possible but through a “segregated” account – which typically comes with extra administration costs.
Councillors were told that with “passive” mandates there will always be some exposure to Israel.
But with “active” mandates it is up to the fund manger to see where they see value, and they can take a view on “problem stocks or problem regions”.
Green councillor Alex Armitage also asked about the potential to “disinvest” from investments linked to Israel.
But Lerwick South member John Fraser said he felt a seminar for councillors may be a more appropriate forum to discuss “political ideas” and allow folk to “get it all off their chest”, saying he felt things should stick to what is on the agenda.
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However, Robinson said his motion was just an opportunity to check the SIC’s involvement in organisations that are invested in Israel.
His proposal, which was approved, was to ask fund managers to “reconsider any investments in Israel through the lens of their own revised ESG [environmental, social, and governance] statements and against our requirement for investments to comply with the United Nations’ principles for responsible investment”.
Robinson said this could be a first step – with the councillors then potentially being able to reconsider things depending on the response they get back.
It comes just over one year after councillors approved a motion, led by Armitage, calling on the UK Government to use the power at its disposal to achieve an immediate and permanent ceasefire by all parties in the Gaza conflict.
The decision on the investments was also welcomed post-meeting by Armitage.
He said “after 18 months of genocide perpetrated by the Israeli government against the Palestinian people, it is right that the SIC is putting its money where its mouth is, and following up its call for a ceasefire with a move toward divestment”.
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