To receive a report on Environmental, Social Governance and Fiduciary Duties. (Report No: 90)
The Committee received a report on Environmental, Social and Governance and Fiduciary Duties (Report No: 90)
1. The Pension Fund trustees have a fiduciary duties around risk adjusted returns.
2. Investing in ESG would feed into the risks. Divesting from fossil fuels could result in an immediate reduction in profit.
3. ESG can be effective long-term investments.
4. A triennial review is due to take place where it would be possible to review all the fund investments. Work needed to be done to review every investment portfolio and look at the exposure to carbon on the basis of underlying values.
5. LCIV were not felt to be doing enough in this area but there was an opportunity to encourage them to bring in new investments.
6. Lobbying the LCIV to make changes could be effective as they can exercise economies of scale and work across the London boroughs. More research is needed.
7. Currently the structures do not exist, but it would be possible to put pressure on to enable them to be developed.
8. There were some concerns expressed about the way that the LCIV was working at present.
9. Any changes would also need to be discussed with the Pension Board.
1. To note the direction of travel
2. To set up a separate meeting of the Committee to understand better the underlying issues, to review the portfolio and to consider investment values.
AON and officers will do some background research to find out more about what is available including from the LCIV.