Agenda item

No urgent matters.

Question put forward by a member of the public, Sue Lewis, Bodfari –

“The Clwyd Pension Fund Committee, hosted by Flintshire, has recently consulted with employer members of the Fund, including Denbighshire, on the development of its Responsible Investment Policy.  Amongst other things, this looks at the issue of disinvestment from fossil fuels.  Did Denbighshire respond to this consultation, and if so, can you share with us your response please?”

Response by Councillor Julian Thompson-Hill, Lead Member for Finance, Performance and Strategic Assets as follows -

Denbighshire is a member of the Clwyd Pension Fund which is administered by Flintshire County Council.  The late Councillor Huw Jones was the elected member on the Clwyd Pension Fund Committee (“the Committee”) on which he had served for a number of years.  The Committee oversees the Pension Fund.   In addition, officers from Denbighshire County Council interact on a regular basis with officers from the Clwyd Pension Fund. 

Clwyd Pension Fund has an investment strategy in place, obviously, its primary objective is to ensure current and future pension liabilities are able to be met in full.  The Fund update those policies on a regular basis and their investment strategy does state that they will make selective investments in environmental areas such as clean energy, environmental infrastructure, and forestry projects.

Currently around 1.2% of the Funds’ assets are invested in fossil fuel areas.  Denbighshire County Council’s Head of Finance and Property attended Steering Group meetings in the autumn and early winter 2019 and fed back into that Group the discussions we had been having internally within Denbighshire regarding the development of our policies to become carbon neutral.  All of those discussions fed back into a draft version of the Responsible Investment Policy for the Clwyd Pension Fund.  The draft Policy very much reflected Denbighshire’s own internal discussions which had taken place with regards to prioritising the importance of climate change and taking that into account in their decisions going forward. 

Therefore, we are support the adoption of the draft Policy as it was in line with Denbighshire’s internal discussions. 

Highlighting a section from the Policy as follows:

Consideration in respect of climate change is not only the duty of the Fund but is also consistent with the long term nature of the Fund.  The Fund investments need to be sustainable to be in the best interests of all stakeholders.  Engagement is the best approach to enabling the change required to address the climate emergency.  However, selective risk based disinvestment is appropriate to facilitate the move to a low carbon economy.

The Fund has three main priority areas and one of those in the responsible investor priorities states that they intend to measure and understand the carbon exposure within the investment portfolio and then once assessed, that there be an agreed carbon reduction target within twelve months to be implemented over the next five years.

Supplemental Question put forward by Sue Lewis –

Would Denbighshire County Council follow the Welsh Government and other councils such as Cardiff and Camarthenshire and pass a resolution stating they wish their Pension Fund to disinvest entirely from fossil fuels within a fixed time frame.

It is understood that the council can only advise fund managers but this would, nevertheless, give a very powerful message to the public, to its beneficiaries that you mean business and would be in line with your Policy of carbon reduction.

Further response by Councillor Julian Thompson-Hill, as follows –

It is possible Denbighshire County Council could make such a resolution.  In terms of the governance structure, we are only one vote amongst five on the Committee, so it would depend on the other local authorities having a similar point of view.  It is not within our gift to insist upon it, but I see no reason why such a resolution could not be made.  We could not do it today but would have to take it through the formal process.