Wednesday 26 February 2020

Is Brent getting any closer to fulfilling its fossil fuel divestment pledge?

Cllr Shafique Choudhary, in a highly unusual contribution to the Allowances section of the Full Council agenda last Wednesday, made the case that the complexity, workload and responsibility - with the added issue of climate change, meant that the Chair of the Pensions Sub-Committee deserved a substantial additional allowance. 

Cllr Choudhary spoke about the role in the third person without mentioning that he is the Chair of that sub-committee. LINK

Certainly last night's meeting of the committee had a very heavy, complex and technical agenda and would have required a considerable amount of homework.  The committee had pre-meeting training on a range of subjects including the welcome addition of climate change, which made a very long evening for members and officers.

I was there as a member of Divest Brent, a cross-party and non-party group that want Brent to divest its pension fund from fossil fuels. This is a manifesto commitment of Brent Labour Party supported by more than 1,000 petition signatories and Brent NEU which represents support workers in schools who are members of the Pension Fund, among a range of other civil society groups. Divestment is made all the more relevant and urgent following the Council's declaration of a Climate Emergency.

Despite this, although there were warm words at the meeting about the need to take account of climate change it did not seem to move much closer to outright divestment. Although not included in any specfic recommendation adopted by the committee, there was support for 'engagement' with fossil fuels companies and car manufacturers as exemplified by a presention by LAPFF. LAPFF prioritise climate change and are part of Climate Action 100+

They think that engagement is preferable to divestment and although they would not try and stop clients from divesting would not recommend it.  - a view considered  by Simon Erskine in his presentation (see below). Instead the focus was on investing in low-carbon funds as part of the Fund's portfolio.

The committee agreed the following recommendations:

The Committee should discuss and agree the investment strategy review undertaken by the Fund’s investment advisors, Hymans Robertson, available in Appendix 1.
The following proposals should be taken into consideration:

·That the committee’s current investment beliefs are fit for purpose but expands on its Responsible Investment beliefs in light of the increased focus on, and importance of, this area.
·The current long term strategy is fit for purpose from a returns perspective as it is expected to return in excess of the required return.
·To introduce a global low carbon mandate as part of the Fund’s equity allocation and to delegate authority to the Director of Finance to agree the size and fund in question and to put into effect this investment following discussions at the committee meeting.
·The Fund’s actual investment arrangements will deviate from their target over time and therefore a degree of rebalancing should take place on a regular basis to try and prevent too much deviation from the desired strategic allocation.
Simon Erskine's presentation on behalf of Divest Brent:

Click bottom right for full page:


Simon had certainly done his homework but his recommendations were not addressed by the committee. Perhaps they could be on the agenda of the next meeting.

1 comment:

Anonymous said...

Cllr Choudhary, in a roundabout way, has raised an important point.

Brent has declared a Climate Emergency. If any of the Council's decisions do not take account of its policy on Climate Change, those decisions would be unlawful, as the Government has just found out over the proposed third runway at Heathrow.