Agenda item

The report (LPB12) covers the annual review of the Fund’s policy documents, as agreed by the Pension Fund Committee at its meeting on 7 June 2019. The report has been amended to reflect the revised recommendations agreed by the Committee. For the information of the Board, the decisions made by the Committee were as follows (for confirmation at the September Committee):

‘to approve the revised Investment Strategy Statement as set out in Annex 2, noting the changes as discussed in the report and

(i)            endorse the current approach and direction of travel as set out in the Addressing Climate Change Position Statement, including:

·         the integration of consideration of environmental and social risks, as well as good governance and stewardship into all decision-making processes

·         contributing to a more sustainable and resilient financial system in alignment with the UN Sustainable Development Goals

·         ensuring all portfolios across all asset classes are carbon and climate aware

·         decarbonising the listed portfolios, and developing measurable objectives and targets

·         accessing positive climate impact investment opportunities. such as the 35% investment in renewable energy funds within the infrastructure portfolio 

·         active engagement with the underlying companies through asset managers, engagement and voting specialists and collaborative forums with other investors

·         improving the transparency of reporting including carbon footprinting and fossil fuel exposure and the impacts of our engagements

(ii)          ask Officers to set up a Climate Change Workshop in the Autumn to define timescales, milestones and reporting mechanisms for the above approach and to contribute to the Climate Change Policy being developed by Brunel, seeking participation from a wide range of stakeholders to ensure a balanced discussion; and

(iii)         note the view of Brunel that in light of the above approach, they do not consider a top down approach to divestment to be an appropriate strategy for its clients.

(b)  In relation to Annex 3 – the Governance Policy and Governance Compliance the Committee discussed the proposal put forward by the Local Pension Board at its last meeting that consideration be given by the Committee to mandating attendance by Committee members at certain training events. During discussion of this proposal, the Committee considered that a form of mandatory training was desired, however, that further thought was required and investigation carried out into this matter. It was therefore AGREED to refer these changes to the next meeting of Committee in September following further work;

(c)  to APPROVE the revised policy documents as set out in Annexes 1, 4, 5 and 7, noting the changes in the documents as discussed above;

(d)  AGREE the delegation to the Service Manager (Pensions) the responsibility for exercising the new discretionary decisions as set out in paragraph 47 above, and the subsequent changes in the scheme of delegation to ensure it is consistent with the schedule of Administering Authority Discretions; and

(e)  note that no new changes have been made to the Scheme of Delegation and the Procedure for Reporting Breaches of Law to the Pension Regulator’.

The Board had before it a paper (LPB12) which covered the annual review of the Fund’s policy documents as agreed by the pension Fund Committee on 7 June 2019 and which had been amended to reflect the revised recommendations agreed by the Committee.

Mr Collins presented the report.

He confirmed the Funding Strategy Statement would be reviewed again this year and brought back to the Board at its next meeting.

Regarding the Triennial Valuation and Strategic Asset Allocation Review he confirmed that he would be contacting scheme member representatives on the Board to arrange a meeting to feed views in as appropriate.

Board members highlighted a potential area of concern regarding the need to provide continuity particularly as the end of the current 4-year cycle was approaching.

Councillor Johnston referred to an added pressure arising from the potential for political change in what were volatile political times as evidenced by the recent local elections.

Mr Collins advised that a period of office could be extended and staggered so not all board members reached the end of their tenure at the same time.

RESOLVED: to note the Statement and amendments to it.