The Director presented a report to allow Members to consider the Authority’s approach to exclusions of specific investments from the investment universe following discussion at the March meeting. The report set out the work that had been undertaken by officers in order to investigate and provide detail of the options and implications of each.

The Director advised Members that the choice they are faced with is between taking a decision that may make Members feel better but that cannot be implemented or taking a decision to maintain the current position and seek to influence the direction of the Partnership through building alliances with others. The Director stated that this is a decision for members, but as the principal policy adviser to the Authority, his clear advice to members is to maintain the current position and seek to influence through building alliances.

A Member raised with reference to the report and reflecting on the Members Away Day should engagement fail, should we be arguing for exclusion on whole sectors, such as the fossil fuel industry.

The Director responded that the draft guidance from the Government in preparing the Investment Strategy Statement and Pooling under the new regime makes it clear that individual funds should not be setting policies which exclude sectors or rafts of companies, this should be dealt with at the pool level.

A Member questioned what the reference to a single issue in paragraph 5.14 of the report referred to specifically.

The Director explained that what was meant was that we risk losing credibility within the Partnership if we focus too heavily on exclusion. He noted that we have successfully moved various elements of the pool’s approach both in the responsible investment sphere and wider. This has been possible through building alliances within the Partnership and the Director advised that it is his view that a very strong focus on exclusion would undermine our ability to maintain those alliances and to build new ones.

Members sought assurance for context on the positions of other partner funds.

The Director replied that three of the existing eleven Partner funds have been actively discussing this issue, none of which have taken a decision to do anything different to what they are already doing. For new funds joining the Partnership, this is not on their agenda given the other areas they need to focus on, so gaining consensus on the decision would take a very long time.

In response to further questions regarding there being no Government guidance to funds on international conflicts and occupied territories, the Director noted that the Government’s view can be inferred from the draft guidance which outlines that funds should not be taking a stance on such issues at individual fund level but that this is for the pool to determine.

The Director added that whilst appreciating that there is strength of feeling on such issues, he must remind members that the Authority’s duty is to ensure that we have the funds required to pay pensions when due.  ...  view the full minutes text for item 17