Agenda item

To receive any questions or petitions.

Notes:

1.  The deadline for Member’s questions is 12.00pm four working days before the meeting (8 June 2020).

2.  The deadline for public questions is seven days before the meeting (5 June 2020).

3.  The deadline for petitions was 14 days before the meeting, and no petitions have been received.

Six questions were received from members of the public. The responses can be found attached to these minutes as Annexe A.

Supplementary questions were asked from six members of the public and responses can be found below.

1. Supplementary question asked by Ian Chappell on behalf of Steve McDonald:

The questioner referenced the Committee’s open letter of 9 April 2020 noting that the rationale for not divesting was due to protecting the employees of fossil fuels companies, in contradiction to the recent job cuts by British Petroleum (BP) and the letter also noted the concern for worldwide communities if fossil fuels companies stopped using fossil fuels instantaneously. Do you not acknowledge that communities worldwide have been undermined over the last two decades by fossil fuel companies and their employees are not protected? (Annexe B - full supplementary question and the response).

Response:

The Chairman explained that the Fund’s continued engagement and investment with fossil fuel companies was not impacting on their employment policies as that is decided internally within those businesses.

Officers proposed that a written answer would be provided to the questioner, to explain the matter in more detail.

2. Supplementary question asked by Ian Chappell:

Thanked officers for the initial reply, but noted that the Committee had weak evidence that engagement worked. Can the new sub-group tasked with reviewing the Fund’s Responsible Investment Policy consider with regards to large fossil fuel companies such as BP and Shell: setting specific engagement objectives that are measurable, in line with no greater than a 1.5C temperature rise and have a deadline, can those objectives be published on your website and if those targets are not met will the Fund divest?

Response:

The Chairman highlighted Item 8 on the United Nation’s Sustainable Development Goals (SDGs) which the investment strategy will incorporate and the Fund’s investment core beliefs focusing on Environmental, Social and Governance (ESG) issues. The Committee will not commit to any specific divestment targets, every single investment decision was judged on its merits at the time by the investment managers.

3. Supplementary question asked by Ian Chappell on behalf of Nina Mileksic:

Within the response to the Freedom of Information (FOI) request at the end of 2019, ExxonMobil was the second largest energy holding in Legal & General funds. ExxonMobil had been criticised as being destructive to both the shareholder value and the planet. What has been the extent of your holdings on ExxonMobil - how much and over what time period and can you confirm that it has no longer any part of your portfolio? (Annexe B - full supplementary question and the response).

Response:

Officers proposed that a written answer would be provided to the questioner, to explain the matter in more detail.

4. Supplementary question asked by Jenifer Condit:

The Fund reduced exposure to fossil equities from 3.6% at the end of March 2019 to less than 3% at the end of December, however during that period the markets went up by 11%, fossil fuels went down by 10-15% so fossil fuels underperformed by more than the percentage of the Fund’s portfolio that they represent. Does that show the likelihood that you divested nothing? Fossil fuels significantly underperformed by 25% relative to the rest of the portfolio, how much longer will the SPF watch the value of these positions fall when you could just sell them and be done with it?

The questioner submitted a Freedom of Information (FOI) request for the disclosure of all fossil fuel holdings, in £ value, and as a % of equity holdings, as of May 31 2020. As part of this request she asked if the number of shares held in each of the Fund’s fossil fuel holdings as well as the decrease and increase comparing the positions in fossil fuels could be disclosed? (Annexe B - full supplementary question and the FOI request acknowledged).

Response:

The Chairman commented that markets fluctuate and that fossil fuels were less than 1.8% of the Fund’s investment, investment managers invest in line with the Fund’s mandate whereby short term market fluctuation could be absorbed. He referenced item 8 and the review of the investment strategy in accordance with the SDGs.

Officers proposed that the written supplementary question be provided to explain the matter and the Freedom of Information request in more detail.

5. Supplementary question asked by Chris Neill:

The questioner noted the contradiction inherent in a policy of engagement, that the more immoral it was, the more investable it was also. He asked whether from a moral relativism point of view, if the Committee perceived a similarity between the 18 th century slave trade and the oil industry - both with economic prosperity and exploitation? (Annexe B - full supplementary question and the response).

Response:

The Chairman responded that he did not equate the oil industry with the slave trade, referencing the focus on the 17 UN SDGs built into future investment strategy and the commitment to ESG and Responsible Investment.

Officers proposed that a written answer would be provided to the questioner, to explain the matter in more detail.

6. Supplementary question asked by Ian Chappell on behalf of Helena Ritter:

The questioner expressed concerned that the Fund was surrounding itself with organisations that support engagement as they had a vested interest in it. It was asked whether the Committee took notice of different views which challenged its beliefs and if it would consider inviting the chair of the All Party Parliamentary Group on Sustainable Finance who was committed to divestment, to a Committee meeting.

Response:

The Chairman stated that the Committee did take into account multiple points of view including from members of the public and would build them into its investment strategy going forward.