Issue - meetings

The Committee noted, commented on, and approved the revised RI Policy of the ISS, for consultation.

            The Chair explained that the Fund held a number of training sessions on this topic, and that the proposed responsible investment wording had been circulated in advance of the meeting and was now being brought to the Committee for approval.

            Mr Turner talked the Committee through the RI section of the Investment Strategy Statement (ISS), highlighting key areas of change.

-       The first major change was the establishment of a clear six-stage framework to assess the appropriateness and potential impact of any exclusions considered by the Committee, on page 227 of the pack.

-       On page 330, changes were made to the wording of target 4, addressing investment in sustainable mandates by 2030 within the listed equity portfolio. The target had been changed from 30% to 100% by 2030, reflecting the Fund’s switch to the WPP Sustainable Equity sub-fund. This target will require WPP/Russell to investigate the possibility of a sustainable emerging markets sub-fund. If this is not practicable, the Fund would then potentially consider switching these investments into the existing Sustainable Equity sub-fund.

            Feedback on the proposed wording had been received from Mr Hibbert and Cllr Swash prior to the meeting:

-       Regarding the last paragraph of page 330 and the first of page 331, Cllr Swash had asked if this was sufficiently strong in relation to divestment from fossil fuels, and the Head of Fund had provided a response. Mr Turner explained that this was considered, however it was proposed that the Fund keep the existing wording which was based on the IIGCC (Institutional Investors Group on Climate Change) definition of fossil fuels companies, which is more comprehensive and captures carbon intensive companies across all sectors including manufacturing, construction and transportation.

-       Cllr Swash had also suggested removing some wording in the exclusions policy and this change has been applied.

-       Mr Hibbert had suggested some additional wording around taking action to divest from companies where it was considered that engagement was not effective. Based on this feedback the draft wording had been updated while recognising the balance between the Committee’s ambition and the practicality of divestment in connection to ongoing discussions of an escalation process within WPP.

            Mr Hibbert noted that he approved of the resulting wording.

            Mr Turner then took the Committee through the proposed Exclusions Policy within the ISS. He noted the Local Pension Board’s statement of approval for the process that had been taken and their support for a Paris aligned investment approach, where appropriate. He confirmed that the Board’s proposed change to the exclusions policy would be applied. He explained that the main objective of this part of the ISS was to make clear the Committee’s ambitions for exclusions, and how these are balanced against the implementation challenges and ongoing engagement that will be required with WPP.

            With reference to the key targets within the Listed Equity portfolio on page 330, Cllr Swash questioned whether the aim “to target all of the Listed Equity portfolio being invested in sustainable mandates by 2030” contradicted  ...  view the full minutes text for item 70