Agenda item

Consider report by Director, Finance & Corporate Governance. (Copy attached).

There had been circulated copies of a report by the Director Finance and Corporate Governance seeking approval for the responsible investment objective and metrics for the Pension Fund in line with the Fund’s Responsible Investment Policy.  The report explained that the Pension Fund as part of its fiduciary duties was required to ensure appropriate consideration is given to Environmental, Social and Governance (ESG) issues as part of its investment decisions, whilst acting in the best interest of the scheme beneficiaries.              The Committee and Board, to ensure these fiduciary duties were met, and in line with good practice, approved a revised Responsible Investment Policy on 16September 2021.  The revised policy stated the Committee would seek to monitor key ESG metrics and look to set targets based on their views and how key metrics evolve over time.  To take forward this action a survey was undertaken with all Committee and Board members to identify the key priorities areas with the UN Sustainable Development Goals (SDG’s).  The results from the survey were used as the basis of a workshop on 28 February 2022.  The results of the survey were detailed in the Appendix to the report.  The workshop highlighted challenges around the availability of data to allow some of the SDG’s to be measure in a reliable and robust way.  Due to existing reporting requirements the Task Force for Climate Related Financial Disclosure (TCFD) and Paris Aligned SDG’s relating to climate were the most developed.  The workshop agreed 6 key SDG’s as priorities.  These were SDG 13 – Climate Change,    SDG 7 – Affordable & Clean Energy, SDG 1 – No Poverty, SDG 2 – Zero Hunger, SDG 3 – Good Health & Well-being and SDG 10 – Reduce Inequalities.  Due to development and current availability of data it was proposed SDG13 Climate change and SDG 7 Affordable & clean energy were taken forward with fund managers as an initial priority.   This would allow a baseline position to be established prior to targets being set.  The social SDGs SDG 1 – No Poverty, SDG 2 – Zero Hunger, SDG 3 – Good Health & Well-being and SDG 10 – Reduce Inequalities were currently not able to be measured due to poor data availability.  It was proposed the Fund monitor on an annual basis the improvements to data to enable future objective setting and monitoring. 

DECISION

AGREED:-

(a)     to approve SDG 13 – Climate Change, SDG 7 – Affordable & Clean Energy, SDG 1 – No Poverty, SDG 2 – Zero Hunger, SDG 3 – Good Health & Well-being and SDG 10 – Reduce Inequalities, as the key responsible investment objectives of the Fund;

(b)     to note the output of the survey and workshop on 28 February;

(c)     that work now commence with fund managers on the assessment and collection of data for SDG13 Climate change and SDG 7 Affordable & clean energy;

(d)     to note further reports would be presented to Committee on the results of this exercise to allow targets to agreed; and,

(e)     to note that an annual review would be undertaken on the progress of development of  further information to allow SDG’s SDG 1 – No Poverty, SDG 2 – Zero Hunger, SDG 3 – Good Health & Well-being and SDG 10 – Reduce Inequalities to be progressed as quickly as practicable.