Issue - meetings
Responsible Investment and ESG Considerations for Tower Hamlets Pension Fund
Meeting: 19/03/2020 - Pensions Committee (Item 6.7)
Responsible Investment Accreditation
Meeting: 29/11/2018 - Pensions Committee (Item 6)
6 Responsible Investment and ESG Considerations PDF 391 KB
Additional documents:
Minutes:
Bola Tobun, Investment & Treasury Manager to present the report that outlined the Funds current position on responsible investments, and discusses the Environmental, Social and Governance (ESG) issues currently dominating Pension Fund investment debate. The report also considered what other LGPS funds are doing and recommends alternative ways in which the London Borough of Tower Hamlets Pension Fund (LBTHPF) can further promote the integration of ESG issues into its investment decision making. Amendments made to recommendations VI and deletion of recommendation VII as LCIV not currently considering or have investment in fossil fuel fund on their platform.
In addition, the following recommendations and amended recommendations were noted:
- Note the LBTHPF regulatory obligations in respect of responsible investments (para. 3.6);
- Note the LBTHPF’s current responsible investment stance (para. 3.8);
- Maintain the Fund’s current engagement activities which the Local Authority Pension Fund Forum (LAPFF) carries out on behalf of the Fund (para. 3.13 - 3.14);
- Note the outcome of carbon foot print analysis as at 31st March 2018 as set out in paragraph 3.33; and
- consider a policy (recommendations as set out in paragraph 3.43) regarding the LBTH Pension Fund’s approach to fossil fuel investment with a view to incorporating this within the Fund’s Investment Strategy Statement.
The questions and comments from Members on the main body of the report may be summarised as follows
The Committee:
- Noted that the overall Equity portfolio exhibits approximately 38% lower carbon exposure relative to each Equity mandate held by the Fund contributes to carbon efficiency of the Fund as follows a) Baillie Gifford Global Equities. 40% reduction in Carbon exposure relative to the MSCI ACWI benchmark; b) L&G Passive Global Equities: This passive equity fund demonstrates a very similar carbon intensity to its benchmark; and c) L&G Passive Low Carbon Global Equities: This passive equity fund demonstrates a very similar carbon intensity to its benchmark but has a 72% reduction in carbon exposure;
- Agreed that there was a need for more training and further analysis as to what is appropriate for the Fund;
- Wished going forward to undertake a transition to “fossil fuel free” from “low carbon” and to see examples from other Funds on how they had transited to “fossil fuel free”;
- Noted that there is an increasing demand by members of the London Collective Investment Vehicle for a reduction in fossil fuel investment and a reduction in the Carbon Footprint;
- Considered that careful consideration was needed regarding the priorities on investment with a balance between the benefits of reducing the Funds Carbon footprint without a significant reduction in performance;
- Indicted that it would wish to receive a report providing a clearer picture of the costs and benefits of moving towards “fossil fuel free” investment; and
- Wanted to receive the necessary training to provide the Members with the require skill sets to manage the towards “fossil fuel free” investment.
The Chair Moved and it was:-
RESOLVED
To
- Note the LBTHPF regulatory obligations in respect of responsible investments (para. 3.6);
- Note the LBTHPF’s ... view the full minutes text for item 6