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 15 below).
Minutes:
A deputation had been received from Tottenham and Wood Green Friends of the Earth.
The deputation started by recognising the efforts taken by Haringey to be a pioneer amongst funds in divestment from fossil fuels by moving investments to low carbon funds. However, they stated the climate situation had progressively worsened since those actions were taken and felt the PCB owed it to its residents to now fully commit to 100% divestment from fossil fuels.
The Chair thanked the Friends of the Earth for their deputation and delivered the following response on behalf of the Fund.
“We share the concerns of Friends of the Earth regarding the damaging effects of fossil fuels on the environment, and thank them for their engagement with the Fund. Haringey has previously sought to seek to reduce fossil fuel exposure via using low carbon options for equity investments, where this is possible and where this is consistent with our overriding fiduciary duty, and the majority of the fund’s equity holdings are now invested in low carbon funds. The Fund will discuss in its meeting on 5 March the possibility of moving the remainder of its equity portfolio into a low carbon fund – this is subject to due diligence, and will be followed by formal decision making at a later meeting, once all costs and implementation considerations are available.
The fund’s use of low carbon funds is not the only strand to the fund’s ESG (environmental social and corporate governance) policy however. We have committed to invest c. £70m in renewable energy infrastructure, which the fund believes will deliver the required returns for the fund, but will also make a meaningful and impactful contribution to positive environmental practices. The level of the fund’s investments in renewable energy also remain under regular review. The fund takes its stewardship duties extremely seriously, and is a tier 1 signatory to the Financial Reporting Council UK Stewardship Code.
The fund firmly believes that engagement with companies who display undesirable characteristics or behaviours is the best way to effect change, and is therefore a member of the Local Authority Pension Fund Forum, (LAPFF), who carry out engagement activities on behalf of local government pension funds. The LAPFF is one of the largest collaborative engagement groups, with 79 member funds, who hold around £230bn in funds under management. They engage regularly with a variety of companies, including work to encourage companies to align their business models with a 2°C scenario and for an orderly transition to a low-carbon economy. The LAPFF believes in engagement activities as opposed to divestment, as divestment could lead to investors having no leverage to influence and encourage positive behaviours. The Fund would draw a parallel between this type of activity and the engagement that the Fund and Friends of the Earth have had in recent years.”
Friends of the Earth confirmed they would look in greater detail at the position of the Fund, as outlined by the Chair.
In response to a question by Friends of the Earth, the Fund’s Investment Consultant, Mercer, confirmed that if the Fund was to switch to the RAFI’s low carbon index variant, as per the recommendation in Item 7, that would significantly reduce the overall carbon intensity footprint of these investments by 50%.