Agenda item

The Chair will consider the admission of any late items of Urgent Business.  (Late items of Urgent Business will be considered under the agenda item where they appear. New items of Urgent Business will be dealt with under item 12 below).

Prior to the start of the meeting, the Committee were informed that the group Wood Green Friends of the Earth sought to address them with regard to divestment. As the formal procedure rules had not been followed, the Chair sought the Committee’s permission as to whether to allow the leader of the group to make representations on behalf of the group to the Committee. The Committee unanimously agreed to allow the group to address them.

Quentin Given, on behalf of Wood Green Friends of the Earth, spoke to the Committee. It was raised, that:

·         The number of natural disasters were increasing and this was because of the continual usage of fossil fuel. Governments were not giving the issue the urgency nor the action it was due and the group wanted to see Haringey Council’s Pension Committee and Board make a commitment to complete divestment from fossil fuel. It was noted that other Councils had made similar commitments and were moving towards alternative investments which the group claimed were performing far better;

·         The group wanted the Committee to go beyond its 5% commitment to investing in renewable energy and asked it to timetable a report for the next meeting setting out the steps moving towards divestment in fossil fuel; and

·         The group were mindful of the reality of the time needed to create reports and to make decisions on such issues but asked the Committee to make a decision as soon as it was able to, with regard to the issues raised above.

The Chair thanked Quentin Given for his speech and reassured the group that the Committee shared their concern on the impacts of fossil fuel. The Chair noted that it was his intention to liaise with other Pension Chairs on the issue of a unified and collective commitment to future divestment.

On behalf of Haringey Council, Thomas Skeen, Head of Pensions, addressed the Committee and Board on this topic and noted this the issue of the Fund’s Equity Strategy had only recently been addressed at a previous meeting in March 2018 and there were good reasons why the changes made at this time were done. It is not good practice to make regular changes to the Fund’s Equity Strategy within short time periods. This could potentially damage the fund’s reputation, with participating employers questioning the decisions taken by the Committee, and might affect their contributions to the Fund. Further, the Committee had already invested £276m in a low carbon fund. With regard to when the issues raised by the group could next be timetabled, it was noted that due to time-consuming items on future agendas it was unlikely that this would happen before March 2019.

The Fund’s Investment Consultant, Steve Turner, of Mercer, also addressed the Committee. The approach that Haringey Council’s Pension Committee had taken over the past 4 years had been proactive in committing to a renewable energy allocation of 5%, when other Local Government Pension Schemes (LGPS) had yet to make such commitments. The Committee had to be mindful of attaining the best returns possible, and of liquidity. There was limited scope to increase the allocation to renewable energy without increasing the overall illiquidity of the fund, and it would not be appropriate to have an allocation at a level above 5%. It was important that the Committee had a broad and diversified portfolio to balance the exposure to risk.

Following discussion amongst the Committee, it was noted that:

• The above-mentioned report detailing the Fund’s Equity Strategy, which was discussed during the March 2018 Pensions Committee meeting, was publicly available for viewing, however, there was an exempt appendix with Mercer’s advice to the Committee which was not publicly available.
• As the changes to the Fund Equity Strategy would only have taken effect from July 2018, it was too early to see what the impact of this was. It was prudent to review and make potential investment changes after a period of 3 years, as this was the amount of time usually needed to see how funds were performing.
• The Committee had previously considered making an allocation to a sustainable equity portfolio through the London CIV in March 2018. However, when further details and figures were released, the Committee did not think this would be in the Pension Fund’s interest at that time.
• The London CIV was due to announce details of its infrastructure fund and it was important to see how much exposure this gave renewable energy.
• Regarding the difficulty of timetabling a report to the committee on the issue of divestment in fossil fuel, it was noted that the Committee had to prioritise pieces of work.
• With regard to setting a roadmap for the future on this issue, it was drawn to the Committee’s attention that the Forward Plan was available for consideration at every meeting to discuss what should be on future agendas.
• Members of the Committee and Board were cautious that they did not wish to see this topic become a political debate. It would be prudent for members to increase their level of understanding on the issues affecting the Fund in general before making long-lasting commitments to the Fund’s Equity Strategy. 

It was agreed that, given the heightened level of interest amongst members of the public and the Committee, the issue of divestment from fossil fuel should be further discussed at the March 2019 meeting of the Pensions Committee. This would allow time for officers to prepare a considered report, and allow the Committee to address priority commitments at meetings before March 2019.