Agenda item

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

Grace Annesley attended the committee and presented a deputation, the below is a summary of this:

Grace attended the committee to urge Haringey Council to take decisive action, and that was to divest from companies involved in the occupation of Palestinian land and divest from arms companies. She explained that local activism aligned with the broader public opinion on this matter, 56% of UK voters supported a ban on armed exports to states engaged in human rights abuses.

The following was noted in response to questions from the committee:

• Cllr White queried her representation of pensions funds members, she explained she undertook an online petition to collect names and signatures to form part of a network.
• She had reached out to Tower Hamlets and Waltham Forest council and would like to pass this information across to the committee.
• The Future World Fund does not have blanket exclusions to companies of this nature. There was a version of the fund which followed the European Union's Paris aligned benchmark designation which excluded particular companies.
• In terms of progress, there have been workshops with the committee in terms to understand priorities. This included a survey and officers were going through the analysis, officers were also looking at investments against each priority that was identified through the survey. The team had underestimated the task and how complex it was, aiming to bring a draft responsible Investment policy to the September Committee.

Cllr Dunstall responded to the deputation:

Thank you for taking the time to make your deputation and speak to us tonight. As you’ll be aware, the Council is the administering authority of the Haringey Local Government Pension Scheme, and the PCB exercises that function under the Council’s Constitution. The PCB has a legal duty to manage the Fund by investing in a diverse range of asset classes including equities, bonds, property, and infrastructure in accordance with the Investment Strategy. This diversification aims to generate sufficient long-term returns, ensuring the Fund can fulfil its obligation to pay members’ pension benefits as they fall due.

To fulfil this responsibility, the Fund has, for several years, maintained a policy of investing passively in equity markets through pooled funds managed by external investment managers. This approach minimises investment costs while ensuring appropriate diversification for the Fund. This means that the Fund does not directly hold any shares in individual companies. Pooled funds aim to track the performance of a specific index, following a rules-based approach established by the index provider. Consequently, pursuing exclusionary policies for individual companies or sectors is not feasible without incurring significant costs. Such actions risk financial detriment to the Fund and could breach our fiduciary duty.

As previously stated, the fund does not directly hold any shares in individual companies, however, it does have an exposure risk as a result of those tracker funds, All of the Fund's listed equities are invested through low-carbon tracker funds. This includes the RAFI Multi-Factor Climate Transition Fund, which aims for a 7% annual reduction in carbon intensity (carbon footprint relative to company value) by 2050.

As of 31 December 2024, the Fund’s total investment portfolio was valued at approximately £1.93 billion. Of this total, the Fund had about 0.02% (£0.4 million) indirect exposure to companies commonly identified through several Freedom of Information requests as being linked to the arms trade (for example, BAE Systems, Elbit Systems).

For the same reasons it also has an exposure risk to companies listed by the Office of the United Nations High Commissioner for Human Rights (OHCHR). As of 31 December 2024, the fund had approximately 0.11% (£2.2 million) of indirect exposure to companies commonly identified by the OHCHR as conducting business activities in the Occupied Palestinian Territories. This consisted of 7 out of the 112 companies included on the list.The Fund is committed to the responsible and sustainable investment of its assets. All appointed investment managers are required to be signatories of the United Nations Principles for Responsible Investment (UNPRI). Additionally, we request them to vote our shares in line with the Local Authority Pension Fund Forum (LAPFF) recommendations. LAPFF is an organisation representing 80 plus Local Government Pension Scheme (LGPS) funds and engages directly with companies on behalf of its member funds on a range of environmental, social, governance matters including human rights and international law.

The PCB continuously reviews the Pension Fund's strategies and policies to ensure they are fit for purpose and align with the Fund's long-term objectives. As a result of this ongoing review, we are currently developing the Fund’s Responsible Investment Policy. A draft of this policy is expected to be completed by mid-2025, with implementation commencing in late 2025.

This policy will need to comply with the Council’s statutory obligations on investments and will establish a framework for approaching social, environmental and governance issues across all our investments enabling us to respond consistently to ESG issues now and in the future. This policy will also take account, as appropriate, of the recent legal Opinions (of October 2024 and January 2025) received by the Scheme Advisory Board from Nigel Giffin KC.

Additionally, we plan to establish a governance framework to ensure our appointed investment managers are accountable, based on specific criteria aligned with the Fund’s objectives. This work is also expected to be completed in 2025.