Issue - meetings

The item was introduced by Dapo Shonola (Pensions Investment and Governance Manager). He drew members’ attention to the Fund’s key goals that would make it more resilient to risks associated with climate change, and informed members there was a focus on making investments in companies that had shown a commitment to reducing climate change and had shown good stewardship of other funds. He reminded members of the Fund’s target to be net zero by 2050 and the interim targets that had been put in place since the 2022 baseline. Progress would be reviewed and measured on an annual basis, and would be presented to the Pension Fund Investment Sub Committee as well as the Pension Board.

Responding to a question from Seb Burch, Dapo Shonola said most of the Fund’s investments were placed through Border to Coast rather than being dealt with by Fund officers themselves due to a lack of capacity. A company had also been commissioned to take part in votes on the Fund’s behalf. This company also worked on behalf of other organisations that aligned with the Fund’s values.

Regarding engagement versus divestment, the Chair drew the Board’s attention to the fact the Fund was also a member of the LAPFF Forum. Although it did not give advice to Funds on how to invest, the Forum was able to facilitate engagement between Funds that had made investments in the same companies, and engagement with the Chairs of those companies.

Responding to a question from Mike Snow about targets relating to climate change, Dapo Shonola said the Fund’s policy was not to be in the first or last five per cent of Funds making any transitions. The rationale was the Fund didn’t want to take undue risks by being first, but also did not want to lag behind others by being too slow to enact any changes. The policies set out there was a desire to be in the upper quartiles. However, they would be reviewed on an annual basis. Officers from the Fund would liaise with the Council to summarise and promote each other’s climate strategies, and this would be promoted at the forthcoming AGM. Chris Norton (Head of Investments, Audit and Risk) said there had been a deliberate delay not to rush into making any commitments relating to climate change so any proposals could be studied in greater detail before a firm commitment was made. There were other Funds that had made rash decisions relating to climate targets. Rob Powell (Executive Director of Resources) said there were other factors that would impact the Council’s moving targets, such as the forthcoming American elections that could impact on the performance of companies the Fund had made investments into.

Members noted the contents of the report.