Agenda item

A key priority of the Pension Fund Committee (PFC) is to approve the Responsible Investment (RI) policy after considering the consultation feedback and set a net zero date consistent with its fiduciary responsibility of meeting pension liabilities.

Officers:

Neil Mason, LGPS Senior Officer

Key points raised during the discussion:

1. The LGPS Senior Officer introduced the report and highlighted that the recommendations sought to deal with the responses to the consultation in a timely manner by delegating some of the tasks to a Responsible Investment Sub-Committee. The officer also highlighted that it was proposed that the Responsible Investment Sub-Committee consider the question of selecting a net-zero carbon date. Members further noted that the Sub-Committee would aim to agree a brief to be put to an investment consultant for the purpose of making a recommendation regarding a net zero date.
2. Cllr Williams stated that he agreed with the recommendations and felt that they were a measured way of dealing with the issues.
3. Cllr Williams stated that there were two issues that were not dealt with within the consultation process which was 1. whether the Surrey Pension Fund should withdraw from all fossil fuel investments at the earliest opportunity and 2. the date in which the Surrey Pension Fund assets should reach the target of a net-zero carbon footprint. Whether it was 2030, 2035, 2040 or 2050. Cllr Williams further stated that Waverley Borough Council had provided its views on both issues and that he was interested to see if other key stakeholders provided their views on the two questions. Cllr Williams went on to say that it would be helpful have extensive research into the implications of the different net-zero target dates for consideration by the Responsible Investment Sub-Committee. Following any research, there would be an opportunity to reconsult with stakeholders on the two questions noted above. Cllr Potter agreed and said that it would be sensible to consult key stakeholders on the specific topic of a net-zero target date.
4. Cllr Harmer stated that it would be helpful to understand the district council’s view on a net-zero target date.
5. Cllr Williams further emphasised that he felt there was not a need to repeat the consultation but to specifically consult key stakeholders on a net-zero target date. The Chairman said that his view was that the Responsible Investment Sub-Committee should consider whether stakeholders should be further consulted on the net-zero target date
6. Cllr David Harmer said that consulting borough and districts on an individual basis would be time consuming and that his opinion was that borough and district councils should be asked to provide a joint view on the net-zero target date issue. Cllr King highlighted that many of the borough and districts had only recently agreed their corporate plans and would now be in a better position to provide views on the matter.
7. Kelvin Menon said that, from an employer’s point of view, it would be helpful to understand the implications for the surrey pension fund on the different net-zero target date options.
8. Cllr Potter proposed an additional recommendation to be included within Recommendation 2, which was ‘To agree a process for consultation with key stakeholders with regard to net-zero’. The Chairman moved a vote on each of the recommendations, including the additional recommendation proposed. The recommendations received unanimous support from the committee. 

Resolved:

1.        Approve the delegation of the following to the Responsible Investment Sub Committee (RISC) regarding the consultation

a.    Review the results of the RI policy consultation in January 2023.

b.    Agree any recommendations resulting from the consultation to be put to the PFC in March 2023.

2.         Approve the delegation of the following to the RISC regarding setting a net zero date

a.    Agree a brief to be put to an investment consultant for the purpose of making a recommendation regarding a net zero date.

b.    Receive analysis from the consultant.

c.     Recommend a net zero date to be brought to PFC for approval at 16 June 2023 meeting.

d.    To consider the pathway to the net zero date.

e.    To agree a process for consultation with key stakeholders with regard to net-zero.

3.         Approve officers to continue to work with the RISC, investment consultant and independent advisor to facilitate this process.