Issue - meetings

(a)          The Committee expressed views on the Fund’s RI beliefs, to help develop the Fund’s policies; and

(b)          The Committee agreed the Wales Pension Partnership RI Policy.

Mr Buckland stated that the Fund had decided to review the current approaches in place relating to responsible investing to ensure they had the appropriate focus given recent developments. A survey was sent out to gather views from Committee members.

            Mr Buckland emphasised that the fiduciary duty is to get the best possible return for investment, however he noted that there are considerations regarding ESG risks (Environmental, Social and Governance) that the Fund can and does take account of. There are already policies in place within the ISS (Investment Strategy Statement) such as responsible investment and sustainability policy. Mr Buckland explained the Fund is therefore starting from a well formed policy and is looking to enhance and develop it into something more effective.

He explained that the potential responsible investment approaches are:

-           Integration – ESG factors are integrated – broader perspective and risk/opportunity

-           Stewardship – exercising active ownership (voting rights and engagement)

-           Investment – the aim is for long term growth within areas of positive responsible impact

-           Negative Screening – avoiding investment with a negative responsible impact i.e. tobacco/coal

            Mr Everett argued that blunt screening may well not be necessary if you applied integration well. He believed it would be good to see the process of thinking and challenge. Mr Buckland agreed.

            Mrs Fielder stated that the Fund already has a number of investments in renewable energy and she is looking to integrate this more across the WPP. Mr Everett said that they should welcome WPP's commitment to drive progress in this area and in particular would assurance that the Fund's policy requirements could be delivered by WPP. Mr Latham responded that Russell and Link are at the next Committee therefore the Committee can ask them questions and get more clarity.

            Mr Buckland explained that he attended the Scheme Advisory Board Investment, Engagement and Governance Sub-Committee meeting the previous week where responsible investment was on the agenda. The intention was that there will be Responsible Investment guidance issued to LGPS Funds. The DWP have issued regulations on 1 October outlining that corporate schemes need to have a responsible investment policy. It is also a requirement to have a policy on climate change however the current LGPS do not require this.

            There was a debate around individual fund policies coming together as part of the WPP pool. It was highlighted that is up to each individual administering authority to set its own Fund policy and the pool should be there to implement those policies. However, this can be difficult with eight different administering authorities around the table.

            Mr Buckland confirmed that the results of the RI survey that was undertaken showed four Committee member responses. In respect of the ESG issues, 75% of the results reflected that the Committee had a fairly well developed understanding on investment risk/opportunity and the other 25% felt that they are not that developed in this area.

            Cllr Hughes asked whether the key focus is to look at climate change and at  ...  view the full minutes text for item 22