Agenda item

To consider and note the report.

DECISION

·        To accept and note the information.

·        That clearer definitions were needed for the activity of the Global Growth Fund, particularly under the heading of 'climate metrics'

·        That the Committee's voice and observations were taken into account when the WPP took investment decisions – it had to be ensured that investments were sustainable, responsible and beneficial to Gwynedd

The Investment Manager highlighted that the report included an update on areas of responsible investment within the Wales Pension Partnership. It was explained that an officer from Hymans Robertson was working continuously in this area, with officers from the eight local funds regularly attending a responsible investment working group to discuss the work.

Recent work was highlighted, which included:

·        Evolving Black Rock's mandates to create a unique investment fund to meet the requirements of Welsh funds with a bespoke voting arrangement for Wales.

·        Stewardship Code: The Wales Pension Partnership had been confirmed once again as a signatory to the Financial Recording Council's (FRC) stewardship code, which was good news.

·        Fund-level and national-level climate impact reports were produced that would  be useful to illustrate the fund's comparative statistics.

·        Reviews of the sub-funds highlighted that a great deal of work had been undertaken within the sub-funds to report on ESG strengths and stewardship reports.

Thanks were expressed for the report

Observations arising from the ensuing discussion:

·        The performance exceeded the benchmark

·        The information was useful

·        Clearer definitions were needed for the Global Growth Fund's activity, particularly under the text of 'climate metrics'

·        In relation to investing locally for Gwynedd, the support of local people was needed, and their wishes should be respected. There was a need to be aware locally, and scrutinise how WPP's investment decisions were made – investments should be sustainable, responsible and beneficial to Gwynedd

·        There must be confidence in the investments made, performance and governance monitoring

·        Concern that the Committee's role and control of investments would weaken

In response to a comment that there was a need to invest responsibly and avoid investment in issues that created problems in other countries (e.g. mining for AI batteries – mining conditions may not be sustainable in some countries), it was noted that the implications of investments were regularly monitored, but the observation would be referred to Hymans.

In response to an observation that open discussions were needed with Committee members to ensure that they understood the requirements and were aware of the situation, the Head of Finance noted that these changes were part of the response to the Government's requirements and that all steps would be taken to ensure the best outcome for the Committee.⁠ He added that since the Gwynedd Pension Fund joined the Wales Pension Partnership, the relationship with Investment Managers had changed and the Committee no longer met with them directly. However, he noted that from his understanding, and under the new arrangements, a Responsible Investment Officer would attend the Pension Committees and that there would be an opportunity for Members to challenge and ask questions. An additional meeting of the Pensions Committee would be held on 26 February to discuss and ensure that the agreements were robust for the Gwynedd Fund in its role as shareholder and client.

DECISION

·        To accept and note the information.

·        Clearer definitions were needed for the Global Growth Fund's activity, particularly under the 'climate metrics' heading.

·        The Committee's voice and observations to be taken into account when the WPP made investment decisions – it had to be ensured that investments were sustainable, responsible and beneficial to Gwynedd