Agenda item

The Leader of the Council was asked the following Question by Dr Al Chisolm

In March this year, a motion was passed unanimously by the councillors in this room calling on the Pension Fund Committee to take the best and latest advice on ESG matters, with reference to the Norwegian Sovereign Pension fund’s divestment from oil and gas. This is to be welcomed and is in line with the warning from the Pensions Minister, Guy Opperman, who in March told the House of Commons Environmental and Audit Committee that many trustees are failing to fulfil their duty to consider climate risk.

Since the motion was passed, yet another report has been published, this time by the highly reputable London School of Economics, demonstrating that removing investments from fossil fuel companies has no detrimental effect on returns, but that continuing to invest in them comes with the serious risk of stranded assets. The case for getting out of fossil fuels couldn’t be clearer or more urgent as many major investors, including New York State, have understood.

The Pension Fund Committee has the means to act in line with the motion to protect the Pension Fund from climate risk. The Brunel Pension Partnership offers Low Carbon and Sustainable funds, but so far the committee has rejected these options. There is no evidence that the motion passed by full council was even discussed at the subsequent Pension Fund Committee meeting.   

There appears to be a glaring gap between rhetoric and action on mitigating climate risk.  What concrete action has been taken in response to the Council’s motion and how will you hold the Pension Fund Committee to account on this matter?

Answer

The questions asked are a matter for the Pension Fund Committee which has fully delegated responsibility for all matters associated with the management of the Oxfordshire Pension Fund. 

I am aware that the Committee has considered the issues associated with climate change and fossil fuel investments on numerous occasions and has set out their position and asset allocation in its Investment Strategy Statement.  I also understand that in preparing this Statement, the Committee had advice from its Independent Financial Advisor, and from the Chief Responsible Investment Officer for the Brunel Partnership.  The latter is internationally recognised within the investment community as a leading authority on responsible and sustainable investment.

The Committee is continuing its work with the Responsible Investment Team at Brunel to develop reporting in this area, so that the Pension Fund Committee can demonstrate the results of its current policies in this area, as part of its overall management of the Pension Fund. 

Supplementary Question

It is true that in March 2017, Climate risk was added to that Investment strategy statement.  Since then climate risk has increased but as far as we can tell no asserts have been moved away from fossil fuels as a result.

Will you encourage the Pension Fund to transfer assets including the £21m invested directly in Shell to the Brunel Partnership Low Carbon or sustainable funds as soon as possible?

Answer

It would be inappropriate for me as Leader to direct the Pension Fund Committee in something that they have delegated responsibility for.  There are however members of the Pension Committee here today and I am sure they will bring it to the attention of the Committee.