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 (17 March 2025).

2.  The deadline for public questions is seven days before the meeting (14 March 2025).

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

a     There were no Member questions.

  b     Six public questions had been submitted, those and the responses were published in a supplementary agenda.

There were six supplementary questions:

SQ1 - Borough Councillor Shasha Khan: Called on the Surrey Pension Fund (the Fund) to restrict investments in firms manufacturing cluster munitions which can have a discriminate and disproportionate impact on civilians in conflicts such as in Gaza. The Fund is investing in BAE Systems PLC which makes vital components used for F-35 jets which indiscriminately and disproportionately affect civilians.

The Chairman acknowledged the overwhelming situation in Gaza and Israel, and other conflicts. He noted the Committee’s fiduciary duty to pay pensions, the relevant acts and United Nations policies were followed. He noted that the Committee had sessions on fiduciary duty, which was an important factor in the Investment Beliefs going forward.

A Committee membernoted that fiduciary duty means investing in a way that ensures a suitable return. He noted the need to consider whether the Committee believes that investment in BAE Systems PLC is so significant that to divest would have a direct harmful material impact on the Fund, if not then it is not an issue of fiduciary duty. Noted several crimes against humanity being carried out, with some actions meeting the legal definition of genocide. He noted that if the Responsible Investment (RI) Policy is to be meaningful, a more serious review of the matter was needed.

A Committee member noted that BAE Systems PLC creates systems for the UK’s defence, stressed that it is the Government’s decision to export weapons.

SQ2 - Jackie Macey: Welcomed the reduction of the exclusion threshold from 75% to 25% for oil sands. Asked the Committee to use its influence to reduce the 25% threshold and accept that investment in companies like ConocoPhillips is unacceptable due to its heavy involvement in the production of oil sands.

The Chairman noted that Border to Coast Pensions Partnership (BCPP) undertakes an annual review of its RI Policies, with a light touch review in 2024. There would be an opportunity to contribute to the evolution of the policies in 2025 and the Committee has requested a clear definition of engagement with consequences in the next annual review.

SQ3 - Kevin Clarke: Asked whether the Committee would consider that investment in the oil and gas sector not only affects climate change but also promotesplastic production.

The Chairman noted that it would be factor when the policy is reviewed.

SQ4 - Lucianna Cole: Asked whether there were plans in place to keep Fund members updated on the different potential options and steps taken during any transfer.

The Chairman explained that the interim plan submission deadline for Local Government Reorganisation (LGR) is today and had been submitted by the Council, and the district and borough councils. The final plan to be submitted in May. Discussions would be needed on the Fund’s future administering authority and managing the risks in the transfer. Fund members would be kept updated and their benefits would not be impacted.

A Committee memberhighlighted the other services of greater priority to be a focus in the final plan and asked whether an item could be added to the Forward Programme of Work to discuss potential options, to offer a suggestion to the Council, and district and borough councils on the best way forward for Fund members.

The Chairman added that in some other unitary moves, pensions governance had been an afterthought, he and the Director of Pensions (LGPS Senior Officer) had spoken to the Deputy Chief Executive and Executive Director - Resources who views it as an important issue to address. The Vice-Chairman noted that he raised the issue with the Leader.The Deputy Chief Executive and Executive Director - Resources noted that the matter had been discussed and there was a report at item 18, the Committee’s views would be sought, pensions governance would feature in the final plan in May.

SQ5 - Lindsey Coeur-Belle: Noted that on 7 February 2025 the Government’s actuary department published recommendations to guide and support public sector organisations in Scotland on climate scenario analysis, concerning climate emissions pathways or temperature scenarios, and chronic and acute physical climate hazards.Asked whether the Committee thought it to be a logical way forward for public sector organisations in England and therefore would include it in its Investment Beliefs. 

The Chairman noted that he was unaware of that, it could be considered and he was intrigued to know why that only applied to Scotland.The Independent Advisor explained that the regulatory environment on pensions in Scotland is different to the UK.

SQ6 - Jenifer Condit: Noted disappointment in BP’s announcement that it would abandon its goal to embrace a greener agenda and double down on fossil fuel exploitation. She asked how the Committee would assess the effectiveness of the group of shareholders that demanded an immediate response from BP under the threat of divestment, to the ineffectiveness of the multi-year process of engagement.

The Chairman recognised that it was disappointing, he reiterated the policy of engagement with consequences, BCPP had been asked to make its policy clearer about what happens at the end of the engagement.

The Head of Responsible Investment (BCPP) noted that BCPP had been engaging with BP over several years and supported shareholder resolutions that align with the objectives of the Paris Agreement. Up until the recent changes, BP had a well-developed strategy amongst its peers. BCPP had publicly declared its disappointment and had co-signed a letter with shareholders to raise concerns and request that any changes be put to a shareholder vote. BCPP had met with managers at BP noting that as things stand it would vote against the chair. It was important asan investor to use authority and influence to put the case for long-term climate interested investors.

A Committee member noted that engagement with BP and other companies was undertaken as its business trajectory is incompatible with the Fund’s Investment Beliefsand there is a significant financial risk should BP not align with an effective transition strategy. BP had listened to engagement and the threat to sell shares from other shareholders. He was dissatisfied with the written response from BCPP that engagement should continue, BCPP was failing to implement the RI Policy of the Fund. Engagement with consequences means that consequences should be applied. The Vice-Chairman agreed, consequences are needed to encourage companies to listen.A Committee member stressed the need to be clear when the consequences would apply.

  c   There were no petitions.

Actions/further information to be provided:

1.    1/25 - BCPP will provide a clear definition of engagement with consequences.