Agenda item

11:55

Review of the Investment Strategy Statement including updates to reflect the latest agreed asset allocation. The Committee will also receive an update on the development of a Responsible Investment Policy for the Pension Fund.

The Committee is RECOMMENDED to

a)    approve the revised Investment Strategy Statement;

b)    instruct Officers to set-up a workshop to develop the Fund’s Responsible Investment Policy prior to the 01 March 2024 Pension Fund Committee Meeting; and

c)    change the Climate Change Working Group to the Responsible Investment Working Group to take effect once the Fund has agreed a Responsible Investment Policy

The report was presented by Gregory Ley, Financial Manager-Pension Fund Investment and Josh Brewer, Responsible Investment Officer. It was reported that the Funds Investment Strategy Statement had been updated since the comments received at the last meeting. The Funds Climate Change Policy was also included but no changes had been proposed to that.

The Committee were informed that the largest risk was climate change but the fund was also exposed to a wider range of risks highlighted in the report annex. Responsible Investment was seen as important to the fund members. A survey had been carried out that had received 4000 responses. Over 60% of members felt that fund investments should avoid negative impacts or have a positive impact, social issues were more important than environmental issues and that members had recognition of the wider issues. The next step would be to draft a Responsible Investment Policy to identify the key priorities and an action plan to implement the priority areas.

The next step was to hold a workshop before the next Committee meeting for all Committee and Local Pension Board members. The aim of the workshop would be to develop a set of investment beliefs and identify the responsible investment areas that were the priorities to the fund. The outcomes of the workshop would be used to produce a draft Responsible Investment Policy for consideration at the next Committee meeting.

The Committee thanked and commended the Responsible Investment Officer for the number of responses received from the consultation.

The name of the policy was discussed and the suggestion of calling the policy an Investment Policy, but the Committee agreed that it would be better to use the suggested name in the report.

The Responsible Investment Officer clarified the aim of the workshop would be to give stakeholders a clear set of responsible investment beliefs and priorities so that a policy could be drafted by Officers. The timetable would be to hold the workshop in mid to late January 2024, policy to be drafted and reviewed at the next Committee meeting in March 2024, feedback and decisions from that meeting to be integrated into the final version of the policy to be agreed at the June 2024 Committee meeting and signed off.

The Independent Advisor commented that by doing this, the Fund would be adopting best practice and would be ahead of other funds and also fiduciary duty was part of the Independent Advisors role to monitor.

Councillor Robb commented that there was normally a report presented to the Committee on the LAPFF, would it be possible to invite them to speak at the workshop on responsible investment. Also was this an opportunity for some Communications on the level of responses to a consultation leading to a workshop. These two points were left with Officers to consider.

RESOLVED: That the Committee approved the revised Investment Strategy Statement, instructed Officers to set-up a workshop to develop the Fund’s Responsible Investment Policy prior to the 01 March 2024 Pension Fund Committee Meeting and change the Climate Change Working Group to the Responsible Investment Working Group to take effect once the Fund had agreed a Responsible Investment Policy.