Birmingham University weakens restrictions on investing in arms companies
The University of Birmingham has significantly weakened its restrictions on investing in weapons companies, Middle East Eye has learnt.
The British university has replaced a policy committing to "minimise" investments in arms, tobacco and alcohol companies with weaker "investment principles" that require the consideration of "financially material" environmental, social and governance (ESG) factors.
This makes Birmingham the first British university to weaken rather than strengthen restrictions on arms investments amid Israel's genocide in Gaza.
The university's responsible investment policy, adopted in 2022, committed to incorporating "ESG issues into investment analysis and decision-making processes".
Investment managers were required to "give consideration" to "investment exclusion criteria", including "companies where revenues exceed 10% of revenues with activities connected to weapons systems", as well as "companies manufacturing whole weapon systems, cluster munitions and anti-personnel landmines".
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Also excluded were tobacco, oil and mining companies. The university further said it would "seek to minimise indirect investment in companies which would fall below the ESG standards and exclusion principles".
However, the university's updated investment policy, adopted in June and seen by MEE, does not contain these exclusions.
Instead, it says: "Financially material ESG factors should be considered in manager selection, monitoring, and stewardship."
It also says the university has appointed the bank, JP Morgan, as its outsourced chief investment officer (OCIO).
The policy requires the OCIO to comply with "UK legal prohibitions relating to anti-personnel mines and cluster munitions" and "UK obligations that implement prohibitions on chemical and biological weapons".
'Sends a devastating message'
The policy says "the University expects compliance with sanctions regimes and legal prohibitions".
"Beyond that baseline, where investments have material exposure to elevated-risk activities, the University expects the OCIO to be able to explain the investment rationale, the controls in place and the stewardship approach used to manage the relevant ESG risks."
A University of Birmingham spokesperson said: "We have not made any changes to our investment portfolio due to the change in policy, and our responsible investment expectations are not being lowered.
"We still set the objectives and constraints for our portfolios, while the Outsourced Chief Investment Officer (OCIO) manages day-to-day decisions within them.
The spokesperson added: "Our updated policy strengthens how we explain, oversee and evidence that approach, moving from a fixed list of exclusions to clear, principles-based expectations covering legal compliance, ESG integration, stewardship, voting, climate, human rights and governance.
"We’ve been a United Nations Principles for Responsible Investment (UNPRI) signatory since December 2019, and this update simply better reflects how our delegated, pooled-fund investment model works in practice.”’
'This sends a devastating message to students and staff who believe our university should uphold human rights and invest in education, not the arms trade'
- Antonia Listrat, president of the Guild of Students
But Antonia Listrat, the president of the Guild of Students, the university's recognised student union, said: "This sends a devastating message to students and staff who believe our university should uphold human rights and invest in education, not the arms trade.
"Students voted for their university to strengthen its ethical standards, not make it easier to profit from companies connected to armed conflict."
The previous restrictions on investing in outright weapons companies did not prevent the University of Birmingham from partnering with Rolls-Royce, which mostly manufactures civilian equipment but also makes military equipment, including for the Israeli army.
Birmingham also joined four other universities in entering a strategic partnership with BAE Systems, Britain's largest arms company, in 2019.
BAE Systems manufactures components for F-35 fighter jets used by the Israeli military in Gaza.
During Israel's genocide in Gaza, some universities have tightened restrictions on investing in arms manufacturers in response to student protests. For example, Queen's University Belfast announced it would divest from all investments in Israel in June 2025.
But not all universities have adopted the same approach. The University of Birmingham took student protesters to court over their pro-Gaza encampment on the university campus in July 2024.
The London School of Economics evicted its student protesters from a pro-Gaza encampment that same year.
MEE revealed last October that the University of Oxford was indirectly invested in at least 49 companies flagged by the United Nations and human rights organisations for their involvement in illegal Israeli activities in the occupied Palestinian territories.
MEE further revealed in February that the University of Cambridge's endowment fund had invested more than £140m ($189m) in a fund that owned shares in companies linked to Israeli human rights violations, including Palantir Technologies, Caterpillar and GE Aerospace.
The British government itself imposed a partial arms embargo on Israel in September 2024. But the government also green-lit $169m in military goods to Israel, including 8,630 separate munitions exports in the category of "bombs, grenades, torpedoes, mines, missiles and other similar munitions".
Israeli forces have killed more than 73,000 Palestinians in Gaza and the West Bank since the Hamas-led attack on 7 October 2023 on southern Israel, which killed 1,200 people.
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