Agenda item

To consider any requests received in accordance with Part 4, Section B, paragraph 29 of the Council’s constitution.

The Pensions Committee and Board considered a deputation from Anita Chandler, Haringey Unison Environment Rep (St Aidan's), and Marc Lancaster, acting Chair of Unison Haringey. Anita Chandler introduced the deputation and noted that she was accompanied by Marc Lancaster and by Pamela Harding, local resident.

Anita Chandler stated that Haringey Unison had passed a motion in 2022 which asked the Haringey Pension Fund to divest from the carbon-based economy; a response was requested. She asked that the Pension Fund:

·         Provided a report on the current fossil fuel exposure and an explanation of why this had increased;

·         Reported on the Investment Strategy Statement (ISS) review; including the carbon footprint and the impact of the Pension Fund engagement strategy and how these would inform future investment decisions. It was believed that the public interest in disclosing this information outweighed the public interest in exempting this information;

·         Surveyed the Pension Fund members for their views;

·         Agreed a motion to divest the rest of the indirect investments within three years;

·         Agreed to make the motion to divest public;

·         Reinvested in local and green investments and reported on and promoted the fund’s green investments.

The Chair thanked the deputation for their comments and, in advance of questions, recognised the significant steps that the Pension Fund had taken to reduce the carbon footprint of its investment portfolio in recent years. It was noted that, since June 2021, all of the Pension Fund’s listed equity allocation had been invested with sustainable, low carbon funds; this included the Pension Fund being one of the first investors in the Paris-aligned RAFI Multifactor Climate Transition Fund which targeted annual reductions in carbon exposure. The Pension Fund had also committed approximately £130 million to renewable infrastructure funds that invested in various renewable energy projects, including solar and onshore wind. It was noted that further details could be included in the written response to the deputation.

The Chair noted the commitment of the Pensions Committee and Board to ensuring that the Pension Fund invested responsibly; this included longstanding membership of the Local Authority Pension Fund Forum (LAPFF) and regular instructions to investment managers to vote in line with their recommendations. It was noted that further details could be included in the written response to the deputation. It was acknowledged that, although a significant amount of progress had been made, more could be done and this would be a key consideration in the Pension Fund’s upcoming investment strategy review..

In relation to Pension Fund’s engagement strategy, Anita Chandler stated that she was not convinced that the Pension Fund’s current approach to engagement using LAPFF was effective. She stated that a number of LAPFF’s AGM voting recommendations were outvoted and it had been noted at previous meetings that votes were difficult to win without a shareholder majority. It was commented that a Dutch public health fund, ABP, found that their engagement strategy had failed and was now looking to divest from fossil fuels within two years; it was suggested that the Haringey Pension Fund should have an engagement strategy with timelines, objectives, and escalation options if progress was not made. In relation to fiduciary duty, Anita Chandler noted that green funds had generally outperformed other funds which was a good reason to divest from fossil fuels. She also suggested that divestment would reduce the risk of court action from shareholders for climate risk mismanagement. She commented that the Pension Fund was required to treat all members equally and she believed that the failure to divest could lead to legal claims as it seemed to prioritise current returns over future returns.

It was noted that the deputation had suggested that the Pension Fund should target to divest from fossil fuels within the next three years and it was enquired how this figure had been calculated. Anita Chandler stated that the ABP, which was a large pension fund, was aiming to divest within two years and it was believed that three years would be a reasonable time for the Haringey Pension Fund which was smaller.

Some members commented that it was important to review best practice and asked whether there were any other authorities that were recommended as examples. Anita Chandler noted that she was not a pension advisor but suggested that the Haringey Pension Fund could invest in the local area; it was acknowledged that this was not always achievable but that it might be possible to work with other councils. It was stated that there could be more local and renewable solar panels and wind farms or social housing investment. Pamela Harding commented that there was a community energy company in Haringey and that it could be possible for the Pension Fund to support this. She also suggested that buildings could be self sufficient in energy terms. Anita Chandler stated that the full deputation statement contained a link to a UK Divest report which included some examples; this would be circulated to members.

Some members noted that the majority of Local Government Pension Scheme (LGPS) investments were made through pension pools as local authorities did not have the capacity or ability to undertake these sorts of projects. It was stated that the Pension Fund was part of the London Collective Investment Vehicle (LCIV) asset pool; the LCIV took into account the environmental, governance and social (ESG) factors as part of their investment selection processes and the Pension Fund worked closely with the LCIV to support this work. It was added that the Haringey Pension Fund had agreed to a low carbon approach for its listed equities investments, ahead of any statutory guidance from the Government. In relation to local investments, it was noted that it was not considered good practice for LGPS funds to invest in their local areas. The points raised by the deputation about the future Investment Strategy Statement (ISS) were noted; the Pensions Committee and Board had started to review the ISS and had identified the importance of agreeing an ESG criteria so that all investments could be assessed in accordance with the Pension Fund’s investment beliefs. Some members added that they agreed that there was scope for improved member engagement.

The Chair thanked the deputation for attending and noted that a written response would be provided in due course.