Decision status: Recommendations Approved (subject to call-in)
Is Key decision?: No
Is subject to call in?: No
Lloyd Whitworth, Head of Investment & Stewardship
Sandy Dickson & Jon Cross, Mercer
Jane Firth, Border to Coast
Key points raised during the discussion:
1. The Head of Investment & Stewardship introduced the report by explaining the two parts contained therein. The first was in response to requests from the Committee to have a discussion on some engagement case studies, and the second was in response to the question about the Fund’s exposure to the 25 largest oil and gas companies globally.
2. Jane Firth highlighted the following elements of the report:
3. A Member questioned whether there was a need to re-evaluate whether it was fiducially responsible to be invested in any of these fossil fuel companies especially for the big 25 and whether it was time to acknowledge the fact that engagement was clearly not going to work in changing their approach and if so, to look at divestment.
4. A Member gave reasons for divestment from the fossil fuel companies as:
5. Steve Williams therefore proposed a motion to change the word ‘to note the underlying exposure’ in the second recommendation to read ‘to take steps to eliminate the underlying exposure to these assets classes’. This was seconded by George Potter.
6. A few Members spoke not supporting the motion and would prefer to make an informed and considered decision and therefore discuss in June 2024 in line with the review of the RI policy.
7. There was much discussion on this before George Potter made a further motion to retain recommendations one and two but to add a third to read ‘it is recommended that the committee ask officers to include as part of the RI Annual Review in June, an assessment of the implications and impact of the exclusion of investment in the largest 25 fossil fuel companies.’ This was seconded by Steve Williams who withdrew his original motion. Following a vote, the motion was carried.
Actions/ further information to be provided:
1. That the engagement case studies presented by BCPP be noted.
2. That the underlying exposure to the largest 25 fossil fuel companies within the global equity mandates and the engagement approaches by BCPP, Legal & General Investment Management (LGIM) and Newton Investment Management be noted.
3. That officers be requested to include as part of the RI Annual Review in June 2024 an assessment of the implications and impact of the exclusion of investment in the largest 25 fossil fuel companies.
1.26pm the Committee took a comfort break and reconvened at 1.38pm
Publication date: 31/01/2024
Date of decision: 15/12/2023
Decided at meeting: 15/12/2023 - Surrey Pension Fund Committee