Agenda and minutes

To agree the Council’s procedure rules for remote meetings.

RESOLVED –

THAT the Council’s procedure rules for remote meetings be agreed.

Apologies for absence were received from Councillors Jenny Mulholland and Ranjit Singh.

There were no declarations.

There were no deputations.

Broadcast of the meeting

The Chair to announce the following: “In addition to the rights by law that the public and press have to record this meeting, I would like to remind everyone that this meeting is being broadcast live by the Council to the Internet and can be viewed on our website for six months after the meeting. After that time, webcasts are archived and can be made available on DVD upon request.

If you have asked to address the meeting, you are deemed to be consenting to being filmed and to the use of those images and sound recordings for webcasting and/or training purposes. If you are addressing the Committee your contribution will be recorded and broadcast.”

Any other announcements

Broadcast of the meeting

The Chair announced that “In addition to the rights by law that the public and press have to record this meeting, I would like to remind everyone that this meeting is being broadcast live by the Council to the Internet and can be viewed on our website for six months after the meeting. After that time, webcasts are archived and can be made available on DVD upon request.

If you have asked to address the meeting, you are deemed to be consenting to having your contributions recorded and broadcast, including video when switched on, and to the use of those sound recordings and images for webcasting and/or training purposes.”

Welcome the new Director of Finance

The Committee welcomed Daniel Omisore, the new Director of Finance, to the meeting. It was noted that he had worked in local government for 17 years at a number of different London Councils. Previously coming to Camden he had spent 3 years with the London Borough of Brent, where he oversaw a private placement in March 2020, which raised substantial funding, around £80 million, for the Council. The aim was to diversify the borrowing options the Council had. The funding was put towards a number of key projects in the capital programme including housing, regeneration schemes and a number of strategies emanating from the climate emergency strategies announced in 2019, which had a number of parallels with Camden’s climate action plan. The Committee looked forward to working with him in the future.

Treasury and Pension Fund Manager

The Chair informed the Committee that Tony Wainwright, Treasury and Pension Fund Manager, would be leaving Camden for a new job in Sutton. He thanked him for his work on the Pension Committee, especially his work on progressing carbon footprinting, ESG and Fund managers. The Committee wished him well in his new job.

There were no other announcements.

There were no urgent items of business.

To approve as a correct record the Minutes of the meeting of the Pension Committee held on 24^th November 2020.

RESOLVED –

THAT the minutes of the meeting of the Pension Committee held on 24^th November 2020 be approved as a correct record.

Report of the Executive Director Corporate Services

This report reviews the proxy voting carried out by the Pension Fund from 1^st January 2020 to 31^st December 2020. Advisory services are provided by Pensions & Investment Research Consultants Ltd (PIRC).

Consideration was given to the report of the Executive Director Corporate Services.

This report reviewed the proxy voting carried out by the Pension Fund from 1^st January 2020 to 31^st December 2020. The Camden Pension Fund employed Pensions and Investment Research Consultants Ltd (PIRC), a corporate governance advisor to review company voting resolutions and execute the proxy votes of the Fund in accordance with its policy.

Officers from PIRC were in attendance at the meeting to present their report attached at Appendix A.

Janice Hayward, Client Services Director, gave a summary of the services PIRC provided for Camden, as follows:

·     Camden had been at the forefront of corporate governance for many years and had led the way with local authority pension funds.

·     PIRC annually updated the templates and customised the corporate governance reports for general meetings, including both AGMs and EGMs.

·     In 2020, PIRC customised 800 reports on the segregated account and passive index account (Legal and General). PIRC carry out the segregated voting on Camden’s behalf, but could not carry out the passive voting, although they did provide Legal and General with a website showing voting recommendations. They then split out the vote and cast them according to the Fund’s guidelines.

·     PIRC provided quarterly proxy votes to the Fund.

·     PIRC also had a voting disclosure database, which could be linked straight into the Pension Fund database and would produce a real time disclosure. This was something Camden could consider for the future.

·     They provided weekly client newsletters, which included AGMs and EGMs coming up in the weeks ahead and the PIRC watch list, which listed companies they were monitoring and provided alerts on any issues associated with those companies. In 2020, out of their Universe of 4000-5000 companies, they were monitoring 113.

·     Seminar and webinars were provided on current and emerging issues. Recently a webinar was hosted on the Supreme Court judgement regarding Uber, which involved a GMB representative and 30 clients.

·     A webinar was due to be held this week to launch PIRC 2021 shareholder voting guidelines. External speakers would be attending from the US Change to Win, who would be talking about shareholder resolutions on racial equity on boards and from the Children’s Investment Foundation to talk on climate resolutions.

Ralph Neville-Jones, Proxy Service Leader, summarised the main points set out in the review of proxy voting for 2020, as follows:

·     During the period under review the fund voted 11,594 resolutions (2019: 11,099) at 803 meetings (2019: 767).

·     Of all meetings voted by the fund globally, 78.3% were AGMs, which was lower than in 2019 (82.1%) due to Covid 19.

·     In broad terms 89.2% of the meetings were in the UK (2019: 91.8%), 5.7% were in Europe (2019: 3.7%) and 3.1% were in North America (2019: 2.7%). The rest of the world accounted for 2% (2019: 1.8%) of all the meeting voted during 2020.

·     The fund supported 8,076 resolutions or 69.7% of the resolutions it voted on.

·     Globally, the fund supported 78.7% of all directors  ...  view the full minutes text for item 8.

Report of the Executive Director Corporate Services

This report sets out the proposed guidelines and forms the policy on which Camden will submit proxy voting on shares held in the Camden Pension Fund.

Consideration was given to a report of the Executive Director Corporate Services.

This report set out the proposed guidelines and formed the policy on which Camden would submit proxy voting on shares held in the Camden Pension Fund for the coming year. This was done ahead of the proxy voting season, which tended to be March onwards. It encompassed the Fund’s investment beliefs, ensured transparency and incorporated the key parts of the corporate code and corporate governance, including board structure, remuneration, climate change and management of ESG issues.

The Committee noted that the Camden Pension Fund employed a corporate governance advisor, PIRC, to review company voting resolutions and execute the proxy votes of the Fund in accordance with its policy. This report laid out that policy for the coming year.

PIRC offered a bespoke voting solution to Camden, which would ensure that the votes cast fully reflect the opinions of the Fund. The proposal for the 2021 Camden voting policy statement from PIRC was detailed in Appendix A. It was noted that amendments from the current voting policy were shown in red or crossed through text to allow easier comparison with the current policy. The Committee also noted that Appendix B set out PIRC’s scoring methodology. Appendix C explained how the voting guidelines linked to the United Nations’ Sustainable Development Goals (UN SDGs). Officers from PIRC were in attendance at the meeting and highlighted the proposed changes to the policy.

Ralph Neville Jones, PIRC, highlighted the main amendments made to 2021 template as follows:

·     For the report on votes and accounts, a lot more of the background analysis had been included. The Fund had been incorporating the environmental and social aspects of ESGs into its voting policy for some time.

·     With regard to virtual meetings, the stance had been adjusted to reflect the reality and impact of Covid 19 where necessary.

·     Incorporating the just transition of SDGs, it had been suggested that the fund should attempt to hold boards to account and chairs of the Sustainability Committee, or if they did not exist, the officer responsible or the chairman, should be voted against where the policies were insufficient to meet Camden’s criteria or expectations.

Councillor Johnson referred to Appendix A on page 82, and said that the issue “Political party donation/expenditure in UK” has been changed from “EU” and she understood the reason for this. However, the next issue listed on page 83 was “Political donation/expenditure reported outside EU over £5,000”, so there appeared to be no issue linked to companies in the EU. Alan MacDougall, PIRC, said that the intention had been to divide the template into two parts, one with a UK focus and the other with a global focus, as set out on page 102 of the agenda. He acknowledged that an error had been made and the second issue referred to should have been included in the global section of the template. He agreed to amend the template and circulate the corrected version  ...  view the full minutes text for item 9.

Report of the Executive Director Corporate Services

This report presents the performance of the Pension Fund investment portfolio and that of the individual investment managers for the quarter ended 31 December 2020.

This report has an appendix which contains information exempt within the meaning of Schedule 12A to the Local Government Act 1972 and is not for publication. The appendix has therefore been circulated to Committee Members only.

If the Committee wishes to discuss the contents of a closed exempt appendix it may pass the proposed resolution identified at the end of the agenda to exclude members of the public and the press from the proceedings for that discussion.

Consideration was given to the report of the Executive Director Corporate Services.

The Committee noted the performance of the Camden Pension Fund investment portfolio and the individual investment managers for the quarter ended 31^st December 2020 (quarter 4 of 2020) and since manager inception.

The Committee noted in particular that

-  The announcement of vaccines, indicating that an end to the pandemic could be close, along with a rebound in growth, caused all asset classes to rise, especially equities and commodities. The US, Eurozone, UK and Japanese economies grew 7.4%, 12.6%, 15.5% and 5% respectively in Q4, although GDP levels were still below where they were a year ago.

-  In equities, sectors that had previously performed badly during the pandemic outperformed in Q4 and vice versa.

-  The UK FTSE All Share also performed particularly well, at a 12.6% quarterly gain, as the Brexit outcome lifted much uncertainty in the UK and so did the news of a vaccine rollout.

-  North American equities performed least well at 6.8% over the quarter, due to uncertainty over the US election and the Covid-19 crisis. On an annual basis however, North American equities performed amongst the best, as the S&P 500 and Dow Jones Industrial Average both closed at record levels.

-  The portfolio had a market value of £2.031bn at 31^st December 2020, compared with £1.812bn at 30 September 2020, an increase of 12.1%.

-  The overweight position in cash would soon correct itself as the £150m bulk transfer out of the Improvement and Development Agency’s (IDeA) assets from Camden to the Merseyside Fund was still scheduled to occur on 1st April.

-  The Fund’s equity allocations still remained above the strategic asset allocation levels due to strong outperformance of equity markets over successive years. The high proportion of equities was driven by the volatility in overall returns. This would be addressed as the Fund implemented its new agreed investment strategy to move into index linked gilts if their 20-year yields rise above -1.5%. The phased sell out from Legal and General’s UK Equity fund into Legal and General’s Future World Market Capitalisation Index Fund was instructed to begin from 1^st February, with tranches of £38m every month until 1^st July 2021 when the balancing figure would be transferred across. This would also reduce the carbon footprint in that part of the portfolio by 87%.

-  Over this quarter the Fund had performed well against other funds in the PIRC universe, achieving 8.7% compared to 6% of the benchmark. Over the 10 year period the Fund had also outperformed that universe by 9.8% versus 8.1%.

-  The latest asset valuations, at 31^st December 2020, were markedly above their level last quarter and 30% higher than their low of £1,557.1m at 31^st March 2020. The Fund’s high exposure to equities had fuelled such volatility.

-  With regard to manager’s performance, as shown in table 7 (page 154), the Fund had exceeded  ...  view the full minutes text for item 10.

Report of the Executive Director Corporate Services

This report provides a quarterly update on developments at the London Collective Investment Vehicle (CIV) in creating sub-funds for the spectrum of asset classes, on-boarding of assets and development of the CIV’s staff resource. Progress with the London CIV contributes to the Government’s pooling agenda and drive to reduce costs in the Local Government Pension Scheme (LGPS).

This report has an appendix which contains information exempt within the meaning of Schedule 12A to the Local Government Act 1972 and is not for publication. The appendix has therefore been circulated to Committee Members only.

If the Committee wishes to discuss the contents of a closed exempt appendix it may pass the proposed resolution identified at the end of the agenda to exclude members of the public and the press from the proceedings for that discussion.

Consideration was given to a report of the Executive Director Corporate Services.

The Committee noted a quarterly update on developments at the London Collective Investment Vehicle (CIV) in creating sub-funds for the spectrum of asset classes, on-boarding of assets and development of the CIV’s staff resource. Progress with the London CIV contributed to the Government’s pooling agenda and drive to reduce costs in the Local Government Pension Scheme (LGPS).

Committee Members noted that their key targets in relation to Responsible Investment in 2021, related to carbon foot-printing and proxy voting. They had recently signed up to an external data provider and would be using this to help build their own in-house Environmental, Social and Governance (ESG) metrics covering fixed income too. They wanted to analyse their carbon and transition risk better, incorporate recommendations in a climate position statement and include a line of trajectory with next steps. The climate risk analysis for London CIV funds as a whole would be ready, by the end of February/early March. All clients would receive their individual climate risk analysis associated with London CIV funds by April.

The Chair informed the Committee that he was a member of the Responsible Investment working group and was very impressed with the amount of work the London CIV and Jacqueline Jackson were doing in respect of ESG. He looked forward to receiving the risk report. He also thanked Councillor Johnson for attending a number of day time meetings he was unable to attend.

The Committee noted that Appendix A set out the Fund Launch plan and progress to date. This was a Part II appendix, as it contained information relating to the financial or business affairs of particular persons and was, therefore, not available to the public. Committee Members confirmed that they had read the appendix and would take it into account when making the decision.

RESOLVED -

THAT the contents of the report be noted and any comments on progress be feedback to the Chair and officers.

          ACTION BY:           ALL

Report of the Executive Director Corporate Services

This report brings Members up to date with engagement activity undertaken by the Fund and on its behalf by LAPFF (the Local Authority Pension Fund Forum) since the last Committee meeting. This work is important to the Fund’s ambition to be a fully engaged investor and demonstrates its commitment to Responsible Investment and engagement in Environmental, Social and Governance (ESG) issues as a way to achieve its objectives.

Consideration was given to a report of the Executive Director Corporate Services.

The Committee noted the engagement activity undertaken by the Fund and on its behalf by LAPFF (the Local Authority Pension Fund Forum) since the last Committee meeting. This work was important to the Fund’s ambition to be a fully engaged investor and demonstrated its commitment to Responsible Investment and engagement in Environmental, Social and Governance (ESG) issues as a way to achieve its objectives.

The Chair referred to paragraph 1.18, and said that in any instances where ShareAction had approached LAPFF about co-filing a shareholder resolution with a UK bank, he had stepped back due to any potential perceived conflict of interest. Councillor Johnson would deal with those issues instead. Officers were asked to liaise with Councillor Johnson with regard to putting pressure on HSBC and the best way to move forward on this.

          ACTION BY: Executive Director Corporate Services

The Committee noted that in paragraph 2.7, Harris had achieved an A score in its MSCI ESG Rating and said that the portfolio was associated with a potential temperature increase of two degrees Celcius by 2050. Although this was positive, officers were asked to confirm this with Harris and to check if any other funds had a similar alignment to 2% Celsius.

ACTION BY: Executive Director Corporate Services

Councillor Johnson said that LAPFF had held various webinars, a number of which she had attended. She had found them very interesting, particularly where people from other countries talked about how they were affected by mining or climate disaster, which presented a human view point. She felt that it was important for these webinars to continue, as some people were talking about mining associated with the production of new green energies, which sometimes had a similar effect on them as coal mining did on other people. She appreciated the work LAPFF did in this area.

RESOLVED – 

THAT the contents of the report be noted.

Report of the Executive Director Corporate Services

This report sets out items scheduled for future agendas of this Committee together with a record of training/ meetings attended and a list of future training opportunities.

Consideration was given to a report of the Executive Director Corporate Services.

The Committee noted the items scheduled for future agendas of this Committee, together with a record of training/meetings attended and a list of future training opportunities.

The Chair asked Committee Members to inform the Head of Treasury and Financial Services, if they had attended any meetings or wished to attend the LAPFF meetings, meetings with Investment Managers or any training sessions, including refresher training.

          ACTION BY: Executive Director Corporate Services

                              All Committee Members

RESOLVED –

THAT the contents of the report be noted.

The provisional dates for meetings of the Pension Committee being to be held during the 2021-22 Municipal Year are set out below for information:

Tuesday, 13^th July 2021  

Thursday, 23^rd September 2021

Thursday, 30^th November 2021

Thursday, 3^rd March 2022

These meetings are scheduled to start at 6.30 p.m.

The Council will be asked to formally agree the Calendar of meetings for the 2021-2022 Municipal Year at its meeting on 19^th May 2021. All meeting dates avoid major religious holidays and party conferences.

The Committee noted the provisional dates for meetings of the Pension Committee being to be held during the 2021-22 Municipal Year were as follows:

Tuesday, 13th July 2021

Thursday, 23rd September 2021

Tuesday, 30th November 2021

Thursday, 3rd March 2022

These meetings were scheduled to start at 6.30 p.m.

It was also noted that the Council would be asked to formally agree the Calendar of meetings for the 2021-2022 Municipal Year at its meeting on 19th May 2021. All meeting dates avoided major religious holidays and party conferences.

Councillor Quadir informed the Committee that he would be unable to attending the July meeting as he had another meeting that night. As a consequence, the Committee Officer was asked to rearrange the provisional date for the July meeting.

          ACTION BY: Executive Director Corporate Services

There was no urgent business.