The Assistant Director – Investment Strategy presented the Investment Strategy Review report to update the Authority with the recommendation to agree the scope for the planned review.

Noting that Hymans Robertson have been appointed as consultants for this project. The key output of the review will be the Investment Strategy Statement, and this would determine the long-term asset allocation for the coming years until the next valuation cycle.

Members probed whether the Responsible Investment Survey will inform this and to what extent will scheme members’ non-financial interests be considered.

The Assistant Director – Investment Strategy responded that this is one of many factors that will be considered, but the focus will be on high-level strategic issues such as climate change and the route to net zero.

It was noted that some scheme members views are often nuanced and may not be fully representative or directly applicable when considering decisions at such a macro level such as in relation to specific stocks.

The Director added that scheme members’ views from the survey will also inform the Responsible Investment Framework, which will come to the Authority in March as it does every year.

A Member commented that while climate change is recognised as the biggest risk to the portfolio, it appears contradictory to suggest that the 2030 target may not be achievable.

The Assistant Director – Investment Strategy responded that in an ideal world we would move as quickly as possible towards our net zero goals, however, the necessary investment opportunities remain limited, as many companies have not progressed fast enough.

Currently, only a minimal number of companies are aligned with a 2030 net zero target, and we do not want to reduce our portfolio from 30 holdings to just two to meet that timeline.

We will therefore review our current allocation and assess the likely timeline for achieving net zero.

The focus will be on identifying whether there are realistic portfolios we can construct that will allow us to reach our goals and achieve real world impact within a reasonable and achievable timeframe.

RESOLVED: Members agreed the scope of the Investment Strategy Review as set out in the body of the report.