Issue - meetings

Risk Monitoring

Meeting: 13/12/2021 - Pension Fund Investment Sub-Committee (Item 4)

4 Risk Monitoring pdf icon PDF 445 KB

Additional documents:

Minutes:

Chris Norton (Strategy and Commissioning Manager – Treasury, Pension, Audit & Risk) presented this report which provided an update on risks to the Fund and actions taken to manage them.

 

Chris Norton advised that the format for presentation of the summary of risks had been updated. He drew members’ attention to areas where risk scores had been amended since the previous report, stating that long-term investment risk likelihood was higher due to uncertainties around inflation. Investment-related risk associated with COVID-19 had also increased; however, at the time of writing the report, the effect of the Omicron variant was not yet apparent.

 

In response to Councillor Kettle, Chris Norton advised that the increased risk score for COVID-19 was unlikely to significantly alter the overall risk profile. However, it could introduce some short-term volatility to markets.

 

Andrew Felton (Assistant Director, Finance) stated that increased levels of staff sickness presented a risk; however, a high proportion of staff had been vaccinated. The level of risk posed by Omicron would be monitored.

 

In response to Councillor Gifford, Chris Norton advised that cyber security policies had been reviewed with input from ICT colleagues. He reported that testing of systems had not uncovered any previously undetected risks; third party risks assessments were underway to ensure that robust systems were in place.

 

Councillor Kettle queried whether, in recognition of the Council’s declaration of a climate emergency and the importance of the issue, the risk status of climate change should be upgraded from ‘probable’ to ‘very likely’.

 

The Chair acknowledged the urgency of the climate emergency; however, he emphasised that the Risk Summary was focused on the outlook for investments. For example, investment in technologies that were marketable as an outcome of climate change could stand to benefit the Fund.

 

Councillor Gifford stated that climate change presented opportunities as well as risks to the Fund. However, he commented that it was important to emphasise that the Authority recognised the validity and seriousness of climate change.

 

Resolved:

 

That the Pension Fund Investment Sub-Committee notes the report.