Ms Miriam Adams, Interim Head of Pensions and Treasury introduced the report before asking Mr Steve Turner, from Mercer to provide members with a detailed update on the Climate Change related disclosures.

Ms Adams referred members to paragraphs 3.1 to 3.5 in the main report which provided background information on why the Taskforce on Climate-related Disclosures (TCFD) had been commissioned and on Tower Hamlet’s participation. Mr Turner said the data provided in the appended report related to June 2021 but was still valid as it documented the progress made by the LGPS in relation to climate change.  He said it is not mandatory on LGPS at present to comply with the TCFD disclosures however new guidelines were expected in April 2023 and as such this was a good foundation to build on. Mr Turner said the Tower Hamlets LGPS was ahead of others in preparation and by creating a baseline for carbon metrics, had a useful starting point.

Ms Adams added the Committee had agreed a net-zero target of 2040 and it was useful to have a baseline to work from. She said the Committee and the Fund had done a considerable amount in moving into sustainable / low carbon equities and into renewable energy funds and the Fund has since signed up as a TCFD voluntary supporter. She said the fund would continue to monitor its progress against the climate risks by reporting this on the risk register that is reviewed by the Pension’s Board.

In response to comments and questions from members the following was noted:

• Mr Turner stated that the Fund’s investments were no more exposed to climate change risks, when compared to other Funds. He said that in fact the Fund had made better progress to reduce the carbon risk, with a net-zero target of 2040. He said the Fund had various investments such as sustainable equities with LCIV/RBC, low-carbon investments with LGIM and was invested in renewable energy funds. He said whilst the Baillie Gifford Global Alpha Paris-Aligned fund had a net zero target of 2050, the investment strategy would ensure this is actively managed.
• No new risks had been identified since the last quarter from an investment perspective that had not been discussed or highlighted.
• Mr Turner reassured members that the impact of the government’s mini-budget had not impacted on investments related to the green-agenda more than on other investments.
• Mr Turner said the day-to-day management of funds was undertaken by the investment managers including LCIV, RBC and BG who were aware of the climate change net-zero target of 2040. They were responsible for sending the data to Mercer and Ms Adams.

The Pensions Committee RESOLVED to:

1. Approve the final 2020-21 TCFD report (appendix 1) and;
2. Continue to enhance its approach to Climate Risk.