Agenda item

[To receive an update on the work undertaken in relation to responsible investment activities.] [Appendix A to follow.]

Shiventa Sivanesan, Assistant Director – Investment Management and Stewardship, presented the report on the work undertaken in relation to responsible investment activities since the last Pensions Committee meeting.

The Committee were advised that the Fund had completed its 2022 Climate related Financial Disclosures (TCFD) report, marking the sixth year that the Fund had disclosed its climate related risk. The report details progress made in relation to managing climate related risks and opportunities in line with targets set by the Fund. 

The Assistant Director – Investment Management and Stewardship also highlighted the Fund’s Responsible Investment Framework which had been reviewed and updated and required approval.  

It was noted that the Fund had provided its disclosures on developing climate targets to the Institutional Investors Group on Climate Change (IIGCC) as part of its Net Zero Asset Owner commitment and this would be published on the IIGCC website in due course. 

The Assistant Director confirmed that the Fund has responded to a consultation by the Department of Levelling Up, Housing and Communities, in relation to mandatory reporting on the assessment, management and monitoring of climate related risks. A copy of the consultation had been circulated to the Committee.

In response to a question raised by Councillor Hyatt regarding the engagement of companies in relation to their climate ambitions and plans, the Assistant Director – Investment Management and Stewardship acknowledged the importance of testing the credibility of companies’ plans and advised that engagement had increased, with some subsequent improvements being noted. Further, it was noted that the Fund would continue to engage with the companies and that escalation would be considered where required.

In response to a question raised by Councillor Collingswood in relation to the engagement process and progress with company engagement where they held operation in the Occupied Palestinian Territories, the Assistant Director – Investment Management and Stewardship advised the Committee that whilst progress has been made in some dialogue there was more to be done. It was noted that engagement in relation to the concerns raised on this matter was a continual and gradual process on which appropriate progress checks would take place over time.

A further question was raised with regards to the Fund’s commitment to being Net Zero and whether it was consistent with local authorities within the area. The Assistant Director – Investment Management and Stewardship advised that the commitments made by the Fund were consistent with those emerging across the broader pensions industry.

Resolved:

1.    That the publication of the Fund’s 2022 Taskforce for Climate-related Financial Disclosure (TCFD) Report [Appendix A] be approved.

2.    That the Fund’s 2022 Responsible Investment Framework [Appendix B] be approved.

3.    That the Fund’s engagement and voting activity for the three months ending 30 September 2022 [Appendices C and D] be noted.

4.    That the issues discussed by the Local Authority Pension Fund Forum (LAPFF) are set out in the Quarterly Engagement Report, which is available on the LAPFF website: LAPFF-QER-2022-Q3-Final.pdf (lapfforum.org), be noted.

5.    That the voting and engagement activity of the Local Government Pension Scheme (LGPS) Central, as set out in the Quarterly Stewardship Report, available on the LGPS Central website: LGPSC-Stewardship-Update-Q2-2022-2023.pdf (lgpscentral.co.uk),be noted.

That the research and engagement activity undertaken by EOS at Federated Hermes as set out in the Public Engagement Report, which is available on the EOS website: EOS Public Engagement Report (hermes-investment.com), be noted.