Agenda item

Report of the County Treasurer (CT/18/19), attached

(Councillor Hodgson attended the meeting in accordance with Standing Order 8 and spoke to this item)

The Committee considered the Report of the County Treasurer (CT/18/19) on a Notice of Motion on “Pension funds and Fossil fuel companies” submitted to the County Council on 7th December 2017 by Councillor Hodgson which had been referred to the Cabinet in accordance with Standing Order 8(2), and then referred by the Cabinet to the Investment and Pension Fund Committee for its consideration and report, as detailed below:

“In line with its recently affirmed commitment to mitigating climate change, this Council will divest its pension funds away from fossil fuel companies and seek opportunities to invest in companies that support renewable energy. This is moving forward in line with other Local Authorities such as Southwark taking this important step”.   

In addition and because of a significant number of representations being received by members of the Committee and other Councillors in relation to investments in fossil fuel companies, the Committee had requested at its meeting on 17 November 2017 that a report be brought to a future meeting to enable it to review the current “ethical” investment policy. It was therefore timely to consider the Notice of Motion alongside these deliberations.  

The Devon Pension Fund had set out its policies on Environmental, Social and Corporate Governance (ESG) within its Investment Strategy Statement (ISS) and last reviewed by the Committee in February 2017, when a new ISS had been approved.

The Report addressed, in detail, the issues raised both by the Council Motion and the concerns raised at the last Committee meeting, and proposed a way forward.

The County Treasurer reported that the Brunel Pension Partnership was cognisant of the social, environmental and governance issues and policy adopted by this Committee.

It was MOVED by Councillor Channon, SECONDED by Councillor Gilbert and

RESOLVED

(a) that the Committee reaffirms that the Devon Pension Fund is committed to being a responsible shareholder;

(b)  that the Committee recognises the risks associated with Social, Environmental and Governance issues, such as investment in fossil fuels,  and affirms that it will expect its appointed investment managers and the Brunel Pension Partnership to assess the associated risks and take them into account in their investment decisions;

(c)  that the Devon Pension Fund will seek to engage (through the Brunel Pension Partnership, its asset managers, the Local Authority Pension Fund Forum, or other resources) with companies to ensure they can deliver sustainable financial returns over the long-term as part of comprehensive risk analysis;

(d) that the Devon Pension Fund takes the required action to become a tier 1 signatory to the UK Stewardship Code, and the revised Section 6 of the Investment Strategy Statement (as detailed in the Report) be approved;

(e) that the Devon Pension Fund becomes a member of the International Investors Group on Climate Change (IIGCC);

(f) that over the next 12 months, in liaison with the Brunel Pension Partnership Ltd, Officers further develop reports on stewardship and the carbon footprint of the Fund’s investments to be brought to the Committee on a regular basis; and

(g) that, in light of the resolutions above, including the commitment to assess associated risks of the Fund’s investment in fossil fuels, in accordance with the Committee’s fiduciary duty, and in line with the policies relating to Environmental, Social and Corporate Governance (ESG) in the Investment Strategy Statement (ISS) which is subject to regular review, the Council is asked to note the actions of the Investment and Pension Fund Committee and as a result take no further action on the Notice of Motion. 

[Note: In accordance with Standing Order 32(4) Councillor Connett requested that his abstention from the vote be recorded.

The non-voting representatives requested that their support for the vote taken be also recorded]