The Assistant Director – Investment Strategy presented the report to secure approval for the Authority’s various responsible investment policy documents following their annual review.

Members queried whether the Authority should process the results of the questionnaire regarding Responsible Investment and Environmental, Social and Governance matters in relation to SYPA’s investments sent to Scheme Members before agreeing these policies in case the results inform any additions or amendments. The Director explained that the results of the questionnaire would inform the Investment Strategy which would, in turn, inform the next iteration of the policies.

Members asked for further information on the addition to the Climate Change Policy regarding how the Authority interacts with companies that do not have credible climate transition plans, for more clarity on the concept of the Authority reserving the right to act independently should collective action not result in the delivery of its objectives in terms of ESG issues and for more detail of engagement activity measurements and thresholds.

The Assistant Director – Investment Strategy explained that engagement gave the companies time limited requirements and clear consequences if the requirements were not met. The Director added that there was a pathway to exclusion if the companies failed the requirements of engagements but that the threshold was high, and the action of enforcing consequences may go against the strategy of the pool.

The Director explained that although the companies in SYPA’s portfolio currently failing to meet engagement requirements (Shell and BP), constituted only 2% of its overall investments, excluding said companies could have negative impacts in the wider investment market for SYPA and would require the support of the pool and partner funds making exclusion a challenging option.

Members asked what could be added to the RI Policies to give a clearer and actionable pathway to consequences for companies that fail to comply with requirements despite engagement. Members commented that divesting from hard-to-abate companies would not have a negative financial impact on SYPA and that the legal opinion on the fiduciary duty in the context of the LGPS supported their ability to do so. The Chair agreed with the need to send a stronger message with the RI policies and implement change but added that any changes had to be realistic and actionable.

The Director advised that members could ask for amendments to the RI policies to advocate for active exclusion where engagement had demonstrably failed and that there was a need to balance the wishes of members with the reality of being to implement the policies as well as ensuring no financial detriment to the Fund.

Councillor Alexi Dimond proposed not to approve the RI policies but to ask officers to revise the policies to reflect the wishes of members as discussed in the meeting and submit for approval at a future meeting of the Authority. There was no seconder and the proposal fell.

Members proposed an amendment to the recommendation to ask officers to undertake a project looking at options for measures to take when engagement with companies had failed to produce the required outcomes, such as exclusion, to inform development of RI policies when next updated.

RESOLVED: Members

a.     Approved the following revised policy documents appended to the report:

ii.               The Responsible Investment Policy (Appendix A)

iii.              The Climate Change Policy (Appendix B)

iv.             The Net Zero Action Plan (Appendix C)

b. Requested officers review the impact of SYPA advocating for active exclusion where engagement has demonstrably failed and provide the results in a report at the 18 December 2025 Authority meeting.

Councillor Dimond requested the minutes reflect that he voted against the resolution.