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Agenda item

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 29 May 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.

Minutes:

The Committee received the following address:

 

Ms Al Chisholm addressed the Committee on behalf of Fossil Free Oxfordshire. She congratulated the Committee and its officers for travelling a huge distance in the Fund’s response to climate change over the past year. She recognised two particularly positive elements contained in the Climate Change Policy and Implementation Plan. They welcomed the adoption of the 1.5 oC target and the important commitment to keep abreast of climate science as it developed. They also applauded the target to reduce the portfolio’s GHG emissions by 7.6% each year.  They further supported the proposal to invest 100% of the £250M global equity mandate in Brunel’s Sustainable Global Equities portfolio with the caveat that we would like Brunel to publish the GHG emissions and Fossil Fuel exposure data for that fund.

 

She then highlighted two areas where they strongly believed the documents needed to be further developed if those targets were to be feasible and people were able to have confidence in them.

 

The first was the need for a visible plan that more clearly set out a series of actions and milestones to reach the laudable aims to make those annual emissions reductions and to invest in line with a 1.5 oC limit. The plan should give dates by which each milestone would be achieved. She called on OPF to:

 

1.    confirm how, and by when, the 7.6% p.a. target was to be measured across the portfolio.  They would like to see an outline of the methodology it proposed to use to create estimates of actual reductions; how investment metrics (which should be absolute, not relative emissions) relate to the 7.6% p.a. target and how metrics would be used to exclude investments.  Any methodology used must be realistic, for example, Carbon-capture and storage scenarios should only be considered when backed up by detailed plans and committed investments.  Establishing this methodology should not be considered a prerequisite to the following elements of the plan; instead the objective should be to demonstrate the progress of the plan. 

2.    make a formal request of Brunel to provide funds that would enable OPF to meet its 7.6% p.a. target including zero carbon passive and managed funds, and ensure that Brunel is reducing GHG emissions in all their portfolios by at least 7% PA, as stated in Brunel’s Climate Change Policy.

3.    work with Brunel and the other Brunel pension funds to develop a plan to implement the funds developed in response to (1 & 2) and develop a plan to integrate those funds into the OPF portfolio.

4.    reduce the emissions of the portfolio immediately by excluding obvious outlier investments and not wait until a baseline is produced for the 7.6% p.a. assessments. Any credible “engagement and selective divestment” strategy would start by excluding any fossil fuel company still exploring for or developing new fossil fuel reserves, because this fundamentally cannot be aligned with 1.5 oC warming. Recent analysis from the Transition Pathway Initiative [1] (see graph below) demonstrated that no fossil fuel company was adhering to this scenario, and that even those in the vanguard of committing to some degree of emission reductions were far from meeting that target.  No historical analysis of engagement with fossil fuel companies existed which could be used to justify continued investments in fossil fuel companies.

5.    review the entire policy in 2022 including a) the effectiveness of the engagement process as stated at point 10 of the implementation plan and; b) progress on reducing GHG emissions.

The second respect in which, in their view, further work was required, related to Point 30 in the Investment Strategy which they believed was based on two false premises. The first was the implication that scheme members would not support an ethically informed decision to exclude fossil fuel investments from their pensions (yet you report majority support for blanket divestment from those who responded to the consultation exercise). They believed that scheme members deserved to have a voice in this process but were not successfully reached by the consultation, so they called upon the Committee to proactively seek their views on investing in fossil fuels.  They believed such a consultation would reveal support for immediately excluding from the fund any companies that continue to explore or develop new fossil fuel reserves. The second was the implication that considering ethical issues was at odds with “the best long-term financial interests of the Members.” Climate change threatened the stability of the entire financial system, so acting on this ethical issue was entirely consistent with protecting scheme members’ long-term financial interests.

 

The Chairman thanked Ms Chisholm for her address and confirmed that the timescale matter had been considered and would be addresses during their discussions later in the Agenda under the Investment Strategy.



[1] https://www.transitionpathwayinitiative.org/tpi/publications/59.pdf?type=Publication5