Microsoft’s links to the Israeli Defense Force’s (IDF) IT systems have led to questions about the Bedfordshire Pension Fund’s (BPF) investment rules.
Cllr James Valentine (Labour, Bedford Borough Council) warned the Bedfordshire Pension Fund Committee last week (20 November) that the fund’s responsible investment policies may be falling behind with modern technology’s role in armed conflicts.
“The divestment wording all looks fine, it’s just it seems a little bit backward looking, or maybe the other way is to say the world’s changing very quickly,” he said.
“It’s talking about things like thermal power generation… and it refers to stuff like thermal coal and oil sands, and also ‘controversial’ weapons.
“What [people] are talking about a lot these days are the dual use of cloud services and AI services.
“For example, there’s recently a quite controversial case involving Microsoft where following the shareholders’ resolution, they took some of their cloud service away from Israeli Defense Forces which they were using for the surveillance of Gaza,” he said.
Committee chair, cllr Doug McMurdo (Independent, Bedford Borough Council) intervened and said the Microsoft case as a “current” issue and said there were confidentiality issues
Councillor Valentine said that as far as he knew it was resolved.
“It’s more of the general point about cloud services and AI services, which are highly relevant in terms of what shareholders sometimes consider in terms of dual use, he said, “So it’s not just things like coal and oil sands and nasty weapons, it’s particularly cyberspace.
“I’m just making this comment that looking forward, I’m sure we’ll be looking at cloud services and AI services because they’re so pervasive and it’s the way in which they can be used by many different numerous different organizations for different things.
“And that is relevant to the LGPs [Local Government Pension Scheme] and pensions generally.”
The Bedfordshire Pension Fund Stewardship Report 2024/2025, which was presented to the Committee, said: “Geo-political tensions show few signs of abating, and human rights have become an ever more important component of our work.
“In particular, the situation in Gaza continues to worsen; we are therefore working closely with BCPP and our other managers to understand the approaches being taken and exposures to any potentially affected companies.”
Laura Church, CEO of Bedford Borough Council, issued a statement after the publication of this article.
“BPF takes its responsibilities seriously when deploying capital both responsibly and in compliance with legislation according to the jurisdiction, to include the United Nations Guiding Principles on Business and Human Rights,” she said.
“We have been aware of the specific case cited here, with regard to Microsoft Inc., and understand they withdrew from a specific contract in September 2025. Furthermore, BPF will consider shareholder resolutions and exercise our voting rights from time to time.
She also challenged the claim that ‘the fund’s responsible investment policies may be falling behind with modern technology’s role in armed conflicts’.
“The Local Authority Pension Fund Forum (LAPFF), of which BPF is a member, engages investee companies, and Microsoft is no exception.
“We continue to request all investee companies provide greater transparency on their human rights due diligence, particularly concerning data centre locations and the end-use of AI and cloud services in conflict-affected and high-risk areas.”
By John Guinn
Local Democracy Reporter
Update: This article was updated on 27 November 2025 at 16:20 to add a statement from Bedford Borough Council CEO, Laura Church.
