Monday, 28 September 2015

Avon Pension Fund Committee Meeting Sept 2015

This was to be our third full APF committee meeting. We were attending specifically to see how the scoping document for the RI policy would be received, as well as to ask a couple of questions in direct response to that document. This was the first time we had put together questions for the committee as in the past just reading out a statement seemed enough . So it was hard to know what to expect. Colleagues from Transition Bath and a Green Councillor in Bath had also put forward some questions and we knew that since our last visit to this committee Holly had been to the investment committee and Bristol Unison had written a request to the chair for the fund to divest from fossil fuels. So it was beginning to feel like pressure was building on APF and it would be clear to all that we weren’t going anywhere until this matter was resolved.

This committee meeting took place in the grand council chamber of the Guild Hall with its semi circular seating layout and ornate ceilings it did indeed feel like a grand setting.

Joel and I (Richard) were there to deliver our questions and also Virginia from Transition Bath was there observing. On arrival we were given a paper copy of the answers to our questions which came as a surprise as we thought they would be answered within the meeting. The answers were not really helpful other than to clarify that the policy development and workshops would exclude fund members and the public. Our question relating to restricting climate sensitive sectors had a blanket response referring to the fund complying with any regulatory requirements that emerge before the review is complete. Again our question relating to the length (time) of the review was responded to by saying they felt it was an appropriate timeframe.  Not daunted by this I read out the intro statement and Joel summarised our questions and their answers challenging them further on a number of points.

I (Joel) asked the chair if I could seek clarification on the brief (and in our view unsatisfactory) responses we had received.  I should have asked how long I had as I then stumbled over rephrasing the questions and trying to explain to the committee, in layperson's terms, how the downside risk of staying in very climate sensitive sectors was large over the next year but the chance of strong performance from fossil fuels was limited.  It ended up as a debate between Tony and I and he felt like a year for a review was fine but had no evidence - the only clear point I made was he relied on the RI policies of their managers but yet at least two of them have no policy at all.  On reflection I felt I spent all the time I had on trying to find out as much as I could about the fund rather than focusing on the questions we were asking.

Some snippets from the members of the committee. Cherry Beath (Bath Councillor on the Committee) stressed that this was an important  issue and needed the committees close attention. The chair requested that the committee should receive a report back after the Paris COP.

The committee then moved on to discuss Lin’s (Bath Councillor) questions and dealt with these by a quick show of hands as to how many had seen the UNPRI online videos of their recent conference (3-4) and how many had read the six principles of institutional investing (10 hands).

The committee next turned to the voting records of investment managers at AGMs.  Normally investors vote with management (the logic being why own a company unless you like what management are doing!) but sometimes they vote against.  The APF votes against a bit more than average which is good. Richard Orton (unison rep on the Committee) challenged by referring to thermal coal and felt that the investment managers were in the hands of the big companies like Rio Tinto  and nothing was changing. Steve Pearce (Bristol Councillor on the Committee) also echoed concerns using fossil fuel divestment as an example.  The committee were disappointed that the presentation was just about figures rather than wider engagement by investment managers - not saying the RI annual report is brilliant but some of them hadn’t read it all as it details the engagement done on behalf of the fund.

An item detailing the Government’s proposals to encourage pooled arrangements whereby pension funds joined together to reduce overheads and make economies of scale prompted a discussion. It was agreed that APF staff could continue to explore possible options. This could potentially have an impact on our campaign in that governance/decision making could be given to another pension committee.  Although it will take at least a few years to happen so definitely not a reason to stop our campaign.

Finally we came to the presentation of the report introducing the RI scoping document. Liz explained that the £25k costs of conducting the review had not been budgeted for. When challenged whether this was enough money she responded that Mercer already had experience in this area of work and were confident that they could produce what was required within the costs. Steve commented that given this then surely they should complete well within the 12 months.

When opened up to members a number of them were clearly in support of the concerns that we had raised over the year in relation to investment in fossil fuels and their impact on the climate.
·       Comments were made by Ann Beresford (independent member of the Committee), Steve Pearce , Cherry Beath and Richard Orton that fossil fuels are becoming increasingly unattractive investment saying that in 40/50 years time there will be very limited use of fossil fuels.  No one argued against the climate change being an important consideration.
·       Several of them commented that the representations that have been made should be included in the scoping document. One councillor felt that on the scoping document needed to reflect all issues not just those that shouted the loudest. After some further debate it was agreed that the need for the review to examine fossil fuel divestment issues would be covered in the minutes and not in the scoping document.
     The chair said that the review should include all the comments made by the public up until this meeting. This seemed to suggest that further representations to the committee on this matter would not be considered within the time frame of the review. This has led me to reflect that although we should have representation at future committees over the next 12 months there was no need for questions/ statements relating to fossil fuel divestment.
·        In closing remarks Tony said looking at Joel and I that he was sure that we would hold the committee to account regarding inclusion of issues relating to fossil fuels.
It felt like because of our persistence and determination over the last year we had given the committee members permission to raise their concerns about fossil fuels which may well have been overlooked. It is becoming increasingly apparent that we are building a productive relationship with members of the committee and our concerns are being taken seriously.

Richard & Joel