Agenda item

Report of the Executive Director Corporate Services

This report presents comparative analysis of the Fund’s investment managers’ performance on Environment, Social and Governance (ESG) issues against peers and national indicators.

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

The report presented comparative analysis of the Fund’s investment managers’ performance on Environment, Social and Governance (ESG) issues against peers and national indicators.

The Committee noted that

-       the proportion of assets in fossil fuels had fallen from 12.81% in 2010 to 4.66% in 2020. At June 2021, the percentage equity holdings invested in fossil fuel related companies was 3.29%. This was a positive move towards the journey to net zero carbon economy. An analysis of the Fund’s carbon footprint would be brought to Committee in November.

-       With regard to section 3, that all Fund’s investment managers were signatories to the United Nations Principle for Responsible Investment (UNPRI). Each signatory to the UNPRI was required to undergo an annual review which assessed how a participant had implemented the principles of UNPRI in their investment process. Table 2 showed the Fund manager’s UNPRI ratings.

-       Harris rated B for Strategy and Governance. Some of the areas they scored poorly in were responsible investment (RI) in roles and responsibilities, in personal development/training and promotion of RI. Harris had a new Director of Responsible Investment who joined the firm in 2020. Harris commented that they recognised the value of connecting with other organisations, including civil society groups, trade associations, government agencies, and industry peers and had interacted with a number of external groups during the quarter.

-       Table 3 regarding the gender pay gap and mean bonus gap, showed that there was a lot of work to do as manager’s were not meeting the national average and the mean bonus gap was even wider. There was an anomaly with Partners and officers were seeking more information regarding how they collected data as it seemed very different from the others.

-       Table 4 showed the Board/Employee diversity. Some managers were doing well at Board level, but some would have to do a lot more to improve at Executive/senior management level.

The Chair asked for the information in the next report to be more aligned with SDGs and investment strategy and include metrics in work and growth. He suggested that Committee Members could also discuss this at their next Investment Beliefs session.

            ACTION BY: Executive Director Corporate Services.

It was also agreed that the Committee would write a personal letter to Harris stating that, given the extended deadline on UNPRI, the Committee would like to see them hit the target into the higher scores.

            ACTION BY: Executive Director Corporate Services.

With regard to the gender pay gap, it was agreed that the Committee would write to the managers which did not provide the required data and publish the information on the website. The Chair also asked officer to confirm with Partners that the information was correct that they had a negative gender paygap.

            ACTION BY: Executive Director Corporate Services.

It was agreed that a letter would be sent to those managers who were far behind to say that the Fund’s voting policy would be to vote against those Boards with less than 30% of women on their Boards and ask that they update the Committee with the action they were taking to address this. These letters were to be published on the Camden website.

            ACTION BY: Executive Director Corporate Services.

It was noted that Councillor Madlani was chairing the Diversity Working Group and would share this report with them.

Councillor Johnson had been doing a lot of work on LAPFF in what she regarded was a very complex area. She said that she felt that, in addition to fossil fuels, there were other things to be concerned about that could affect the environment and people, for instance mining and land use. When looking at alternative power, some involved the use of rare metals which were found in places around the world and affected the land and the people living in those areas. It was not just a question of simply divesting in fossil fuels completely, it was important to look at what these companies did invest in and the practices they operated. Energy consumption also needed to be looked.

RESOLVED –

THAT the contents of the report be noted.