Petitions and Public Address
This meeting of the Pension Fund Committee will be held virtually in order to conform with current guidelines regarding social distancing. Normally requests to speak at this public meeting are required by 9 am on the day preceding the published date of the meeting. However, during the current situation and to facilitate these new arrangements, we are asking that requests to speak are submitted by no later than 9am four working days before the meeting i.e. 9 am on 7 September 2020. Requests to speak should be sent to Deborah.miller@oxfordshire.gov.uk together with a written statement of your presentation to ensure that if the technology fails then your views can still be taken into account. A written copy of your statement can be provided no later than 9 am 2 working days before the meeting.
Where a meeting is held virtually and the addressee is unable to participate virtually their written submission will be accepted
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Written submissions should be no longer than 1 A4 sheet.
Decision:
The Committee received a public address from Mr Karl Wallendszus on behalf of Fossil Free Oxfordshire.
Minutes:
The Committee received a public address from Mr Karl Wallendszus on behalf of Fossil Free Oxfordshire (FFO). He thanked the committee for involving them in the workshop on climate risk at the end of last year and the working group that followed. They welcomed the shift on climate policy that had occurred since then. Sean Collins had described FFO as “critical friends” so in that spirit he highlighted some issues that were still of concern to them.
He welcomed the overall target to reduce emissions by 7.6 % p.a. for the companies the Pension Fund invests in. Emission reductions should however go hand in hand with reducing investments in companies which hold fossil fuel reserves. Providing unlimited capital to fossil fuel companies, whilst urging other companies to reduce emissions, did not make sense. Therefore, he urged the Committee to adopt targets to reduce exposure to fossil fuel investments.
FFO were hoping that the transfer of £135m from the Passive UK Equity portfolio to the Passive Low Carbon portfolio, as recommended by the independent financial adviser in March, would be an initial step. However, they noticed that only £120m was transferred in May, of which only £24m originated from the Passive UK Equity portfolio, the other £96m being transferred from the Passive Global Equity portfolio, which already had a low exposure to fossil fuels. As a result, the overall exposure to fossil fuels was still high, much higher than some other pension funds in the Brunel pool, such as the Environment Agency and Wiltshire.
Over the last three months Brunel had significantly reduced the fossil fuel exposure of the Passive Global Equity portfolio, which FFO applauded. He asked the Committee to urge Brunel, perhaps in collaboration with other member pension funds, to reduce exposure to fossil fuels in their other portfolios as well, in particular the UK Equity portfolios. In their latest quarterly statement, Brunel had admitted that the poor performance of the Passive and Active UK Equity funds was a result of overexposure and poor performance of fossil fuel companies. That underperformance had been evident for a number of years. According to their calculations, the fossil fuel component of the Brunel portfolios lost £46m in the first four months of 2020, much higher than other sectors. So stranded assets were now a reality. The Pension Fund had a fiduciary duty to maximise returns, and excessive exposure to fossil fuel companies hindered that duty. He urged the Committee not to be complacent.