Agenda item


a)    A Member question and response is attached. 

b)    Public questions and responses to follow.

c)    No petitions were received.



There were no petitions.


There was one Member question.  This and the response were published with the agenda. As a supplementary Steve Williams asked:

a)    in relation to the response to the first part of the question, I would like to ask professional officers whether they were aware of the advice provided to the Derbyshire and Cheshire funds criticised in the report by Professor Steve Keen. Both the LGPS Senior Officer and the Independent Adviser responded that they were unaware of the advice. In response to a requested for this to be a future agenda item the Chairman stated that he would look into the matter and consider whether appropriate to have this on a future agenda.

b)    in relation to the second part of my question, do officers still consider, particularly in the light of COP 28, reference to the beginning of the end for fossil fuels, that there is a trade-off between the fiduciary duty and divestment from fossil fuels? I am suggesting that the approach to date has been that on the one hand, there is the fiduciary duty of the committee and on the other hand, the committee’s desire to do something about carbon reduction and climate change, and that the two are diametrically opposed. My suggestion was that the two are now synchronised because fossil fuel assets will easily become stranded assets and so our fiduciary duty requires us requires us to divest from fossil fuels.

The LGPS Senior Officer agreed in that there was no contradiction between fiduciary duty and good stewardship of assets from the point of view of climate, and also other characterisations of ESG. Hence the committee had agreed on that approach to its responsible investment policy.


There were six public questions submitted.  These and the responses were published as a supplement to the agenda.


There were six supplementary questions:

1.    Kevin Clarke asked if the two banks referred to in the response could be identified and whether there had been any engagement with either of those two companies, and what had been the result so far? 

The Chairman responded that there were some specific examples of engagement in a later item on the agenda.

2.    Jenifer Condit asked on behalf of Lindsey Coeur-Belle: the 18th edition of the Global Risk Report, published in January 2023, states that climate and environmental risks are the core focus of global risk perceptions over the next decade and are the risks for which we are seeming to be least prepared.  Border to Coast acknowledged the fact that six out of ten short term global risks are climate and environmentally related issues. As a result of this growing urgency, will the committee commit to fossil fuel divestment by 2025? 

The Chairman responded that the responsible investment policy would be reviewed in June 2024. Things were changing and it was expected investment managers to take all these factors into account and for them to both engage and consider whether fossil fuels and particular companies are the right areas to invest in.

3.    Jackie Macey asked:  It is encouraging to note that within their engagement with Shell, Newton's referencing scope 3 emissions and investment in clean energy. However, this seems unlikely to be successful given Shell’s stated focus on expansion and exploration rather than transition to cleaner energy. If Shell’s new climate transition plan does not detail a change of policy that reflects these discussions and a move away from developing new oil and gas projects, what will the committee’s response be when engagement is not achieving its aim?

The Chairman responded in a similar vein to the previous question in that it would be expected that these risks be taken into account. Later in the papers there is an analysis of the various investment managers which shows which ones are invested in Shell. It shows that not all of the managers think that Shell is the right investment to make at this time.

4.    Jackie Macey asked on behalf of Janice Baker: Thank you for the responses you collected from BCPP and LGIM. It was quite likely that the 2024 directive on the protection of the environment will trigger prosecutions. Any that are successful would affect the share price and would undoubtedly lead to loss for investors. Bearing that in mind, would the committee regard it is sufficiently significant to include such risk in their risk analysis?

The Head of Investment & Stewardship responded that there was an ESG specific risk in the risk register and highlighted that investment managers were already including these risks in their analyses of stocks.  A Member questioned this response in that the question related specifically to the risk of climate-related prosecutions, and whether this risk is covered by a general purpose ESG risk or if it would need to be considered separately.  The Head of Investment & Stewardship responded that every investment carried regulatory risk.

5.    Lucianna Cole asked: Is pushing for scope 3 emissions to be more widely available part of the engagement strategy?

The LGPS Senior Officer responded that scope 3 emissions would feed into the responsible investment approach of Border to Coast and partner funds. It was anticipated that, as the data set became more reliable, Scope 3 could be a critical point of engagement.

6.    Jenifer Condit asked: My question is about how you see your fundamental role as members of a pension committee. I know that you believe that active engagement can be constructive for the planet and for your pension members as well. Given the increasing pace of regulation, moving away from fossil fuels is essential. Obviously there are changes in the air and my question is, notwithstanding what you see as your positive role owning fossil fuel companies and engaging with them, whether perhaps you might better prioritise your role as pension fund committee members as attending to the risk adjusted return of the assets in your portfolio and if that is the priority, maybe that changes the relative importance of engaging with companies that you don't actually need to own?

The Chairman responded that he would expect to continue to talk to the investment managers and to take risk adjusted returns into account. He also acknowledged the world was changing that that there was a need to consider that in the Investment Policy and in the Responsible Investment strategy.


A Member stated that the written answer on the papers would have been written before we had the outcome of COP 28. The answer does identify there are transitional risks being posed to investments depending on the outcome of COP 28. The member opined that he believed this was important in terms of giving an indication of the direction of travel of government policy. The member interpreted COP 28 as making it abundantly clear that the direction of travel of most governments, were quite clearly aligning around the phasing out of fossil fuels.  Therefore, in the member’s view, the question of transitional risk becomes not a question of if, but when.  At what point will fossil fuel investments become stranded assets? Given the COP 28 outcome, the Member requested an update be brought back to the committee that analysed these outputs and the implications for the investment approach. The Chairman responded that he would take on board what had been said and consider the best way to update the Committee.



Actions/ further information to be provided:

For the Chairman to consider the best course of action on the requests for future agenda items.


Robert Hughes left the room for two minutes during the supplementary for Lindsey Coeur-Belle.


Supporting documents: