Transcript

And I think it would be right if you just start a few seconds just to reflect on 80 years ago, of which the week is full. So I'll just have 10 seconds if that's okay, just for us to reflect on all of those. That's a message. [Silence] Thank you. Well, I was going to welcome a new committee member, Marion Owens, but the idea at the moment she may be here, so I'll leave that one out at the moment. We've got the vice chair who's very busy at the moment on his mental duties in Lincoln, so if I get a call from the King or whoever to go and see, then I'll ask Mark just to step in for me, if that's okay? Everybody's happy. Do you want me to move across there? No, you're alright, thank you. If I move, you move. Okay, so I assume everyone has read the papers as much as they can, taken in as much as they can. And officers are obviously here now to answer any queries. We've got Ian Hill being here from Highlands and we've got Fort Collins represented here too as well. So we'll go straight into the apologies for absence. Is that you, Thomas? Yes, thank you. We've got apologies from Councillors Bunny and Ashley Morris. Thank you. Oh, it's my turn. We've got the declaration of the member's interest. We know where we are with that. If anyone wishes to make a declaration, we've got three. Thank you for your interest as an active and deferred member of the Veterans Fund. Okay. Thank you. I'm acting Member 2. You have acted Member 2? Yes, two, Kirsty. He's an active member. I'm going on the pension and me. And also the one that there's some name of a company in these papers, which I have some investment with, so I spoke to him earlier. I think I'm just going to declare that I can be the pager to me, but when I find it. Thank you. The receipt of a fund pension. Okay, is that everybody? So we'll move on to the minutes of the last meeting, which is on page five then. You can just look out for each page if you think there's something there that is not a true reflection of what went on at the end of the meeting. We've got page five. Tom, you weren't, no declaration then, is that? Wasn't in the last meeting. Yeah. I think I would mention some of the approach set in which some people still need to complete the training, which would be to sort of push you all if you haven't done it. So just a gentle push really, so let's try and get it complete. We'll move on to the essential part, so we've got agenda item four, which is the responsible investment update report. Claire? Thank you very much, Chairman. The report brings to the committee details of the fund's response from investment activity during the final quarter of 23/24. It has recommendations that the committee would consider the report and discuss the responsible investment activity on the payment, and that the committee work towards publishing their first climate-related disclosure report for the year ending March 2025. The recommendation on the engagement on voting activity from LAP, Board of Post, Rubico, Leading and General, and Morgan Stanley are included within the report for sections two to seven. On an annual basis, LAP seeks nominations for membership of their executive. The details of this process and the nomination form for the year ahead will be shared with committee members when it's received, and if any member wants to join the LAP executive committee, then you may submit a nomination form and votes and decisions on that will be made later on in the year. The Board of Post ESG reports for the three equity sub-funds and sterling investment credit are summarised in section eight, and the quarterly reports are attached as dependencies D to G. The final section of the report, section nine, provides details of the task force on climate-related financial disclosure reporting, so TCFD. The committee has already undertaken some initial training to understand climate-related risk and the reporting requirements for TCFD. It is proposed that the committee continue with this work and training with a view to publishing first climate-related disclosures for this financial year, 2024-25, and that report would be completed in the first half of 2025. With this in mind, it's proposed that we have a half-day training session added into the diary for the afternoon of Thursday the 19th of September, so the committee meeting is in the morning, and then that training would follow in the afternoon. And that training will cover some of the key building blocks that we need to get in place for that reporting. So strategy and climate scenario analysis, discussion agreements of climate-related risks and opportunities, and then the relevant time horizon for the funds. All further training beyond that and reporting will be built into normal committee agendas, and further details will be included in the funds annual training plan, which will be presented to the committee in July. I'm very happy to take any questions or reports. Thank you, Chairman. I'm very interested in this sort of PXB and various inputs that the fund makes, either directly or through its investment managers, who then raise questions with the various companies, and it's particularly to do with page 10. And it's banks and banks providing services to various firms, and it's dealing with the third bullet point on that page, which is BAE. And the fact that a lot of attention is being put to companies such as BAE in terms of what happens to the products that they produce in the defence of this country, maybe. And in terms of what happens when these things are used. And as a consequence, certainly months ago, there was a comment in the press that BAE had been de-banked by Barclays, I think it was, presumably because of pressure that's been brought on Barclays. And I do find it strange that significant companies like BAE, and there's a range of them set out in this paper, who are fundamental to the security of this country, then do get into these sorts of issues. And I just wondered whether there's any comment to be made by the officers on behalf of the discussions that take place, presumably in terms of these actions being taken. The part of the report that you're referring to is work that LAP have been doing on behalf of, I think it's 86, 87 other local authority pension schemes across the country. I can happily share with you the full report so you can see all of the details. I think it's probably important to note that it's, I think the piece of work that they've been doing in this respect isn't about criticising, it's about understanding more about what they're doing in the safeguards that they're putting in place. So I think it's for shareholders to know more about it rather than for shareholders to be going in and saying we're unhappy with what the company is, all those companies are doing at the moment. Yes, I hear what you're saying. I wasn't expecting great little differences in the response. But at the end of the day, as you say, the LAPFF do represent us and they do make us for inputs. So I wonder what those inputs are. And in relation to these companies, you know, defence is defence at the end of the day. The Ukrainians effectively fighting a defensive war and as a consequence, you know, there are things that happen that we would not necessarily like in normal circumstances. But if you are defending your country, you know, there is a consequence associated with the use of these products. And unless you're, you know, that's what defence is to a certain extent is having the ability to do these things and hopefully not having to use them. And I do worry, you know, that the security of the company is going to be compromised as a consequence of some of the actions that have been taking place through the ESG agenda to a certain extent. Certainly the committee and the fund have the opportunity annually to contribute to the work plan for that in the earlier part of the year. So I think, forgive my memory, I can't remember if we brought that specifically to the committee this year. But I know we have in the past and we can absolutely make sure that the committee have the opportunity to look at that work plan and look at the priorities for that and then we can happily feed any of those comments back to them. I think that's important. It may well be that the committee overall is, you know, fully behind some of the views that have been expressed. But I think it is, you know, why isn't it probably appropriate to have a discussion within the committee to see so that you're aware of what we feel and whether some of the things that are happening at the moment in terms of defence. But we're moving into a very difficult situation, as you well know. I think we ought to be supporting BAE rather than trying to, you know, limit their ability to actually provide what they're there to do, which is, you know, to help defend the country. So I look forward to that. Yeah. Well, it says there's a fine balance, you know, how to think on that. But it's certainly engaging and it's good that it's around this table. So thank you for bringing that up. Thank you, Jo. Yeah, I just wanted to add, I mean, there are pressure groups that are trying to get funds to divest from arms companies. But that's not something within our policy and the work we've done with Border to Coast and the work we do with LAP. It's not a divestment call at all. It's exactly as you say, there are valid reasons why we invest in these companies. And there are only certain things on the cluster munitions, for example, is one that might meet the divestment if the company was doing that. But actually, these arms companies, those listed there, it's about understanding what they're doing, why they're doing, the wider, the wider remit. So absolutely, that feeds through when we're looking at our voting policy, which we will be doing at the December meeting, having done the work through the Joint Committee with Border to Coast. So I think it's the pressure groups that we need to be able to respond to, along with the fossil fuel type that are saying just divest and actually that is not. Maybe this committee is a bit of a pressure group as well in terms of some of these issues. So I'm very pleased with what Claire says in terms of, you know, perhaps allowing the committee to make some comments as well that you can take into account when you do engage with LAPFF or even any of the other action groups. I think it is important that we don't compromise some of these important firms and the products that they provide, which are fundamental to the security of this country in a growing, difficult situation globally. And we're always happy to take feedback from the monthly email, the weekly email that we send out, we send out a lot of emails, the weekly email that we send out always has the update from LAPFF, saying what companies they've been meeting with, etc. So if there is any other feedback about that, about anything they're doing, absolutely we can raise that on your behalf, back with LAPFF. We say, but we know this takes place. But what we don't necessarily know is the detail of what it is that's taking place. That's the difficulty. And I think that's in the reports that they use. Which is why I think we need the discussion, you know, the committee so that we have a full understanding, which has been said on our parts. I think any other information Joan collects, the more the better, I think, to put out to the committee members. Thank you, Chairman. Welcome to your position. I'd just like to echo what Mark said, fully support his comments there. I think we should be limiting if we are looking at that to what BAE does. I mean, I come from a military background. As you may know, my father both served in the last war and grandfather. That's why I'm wearing the Black Watch tie on this D-Day, serving in the First World War as a sergeant major in the Black Watch. War is a nasty business. And although Mark has alluded to defence, we've also got to think of offence as well. And, you know, we're using some of these munitions, you create etc. I think it's important that we don't hamstring these companies just for the sake of diversity, if I can say that. I think the 6th of June is a very good time to make the sort of comments that both Eddie and I have been making. As a committee, are we thinking much the same? Chairman, I'd certainly endorse that. My late father was a military man and then went on to work for private companies in defence. And the will can change very quickly one week or one month. You could be making an asset for what you think is a friendly country and then that country can turn out not to be. BAE is also, to my knowledge, the only defence company where his Madrasdi's government actually has a sizeable share due to national security. And when I read things like that, especially around the De-banking situation, that really worries me in the world we're in. I think we really need to be setting the things up chain on that. Because as far as I'm concerned, in the world we're in now, we should be saying within international law, if you need to make ammunition to keep this country safe and our allies safe, go and do it. Nothing should hamstring them in doing that. Nothing should be allowed to hamstring them, Chairman. The other point I'd like to make, Chairman, and it's on the same page, is around engagement with banks, because we will all remember the Class A De-banking scandal that came about. And this is a very personal view, Chairman. I want a bank to be a bank. I want the bank to be able to say how many branches it's got, where I can get my money out, am I always going to be able to get my money out, what interest rate it's going to give me. I don't want my bank. Tell me what to think, how to think and go on a crusade, which is what a lot of banks are actually doing now. And we need to be very careful how, I know they've got obligations as companies, but we need to be very careful how that's done, because that's starting, especially since the De-banking scandal and everything else, that's starting to get people's backs up. As a lot of people have said to me, passing, but in my division, it'll just be general conversation. I just want a bank to be a bank. I don't want to be told what to think. I don't want to be told what to buy, what to do. I want a bank to be a bank. I want a shop to be a shop. I know we've got obligations here, but I think that's something else we have to feedback. It has to be done in the right way. You can't drag people with you. You've got to bring them with you by consent. But at the minute, it very much feels like you've been dragged down the garden path against your wishes. Cheryl, have you got anything to say on that? I suppose it's about fixing all the governance stuff, isn't it? The key thing here is that the governance is a place, so those decisions are made in an appropriate way. And that's that's probably the feedback we need to make sure that the decision making is right. Sorry, that's governance stuff, which you like. I didn't understand properly more than those. I think what we could look to do is invite representatives from LAPFF to actually come to a committee meeting. Because obviously there is their annual, their half yearly conference that information has gone out about on the 10th of July that members have all been invited to. They do have their annual conference in Bournemouth in December. But actually, to see you all together as a whole, we can perhaps invite representatives from LAPFF to come to a future meeting so you can ask them what they're doing, why, and get your points across if that would be useful. A good thing. Any more? We'll move on to agenda item five, which is consideration of information. We're going to close session. I'll just read that out and then if I can have a close of a seconder on that. In accordance with section 100A4 of the Local Government Act 1972, the following of January items, not being circulated to the press and public on the grounds of that. And if you can only accept information as defined in paragraph three, schedule 12A of the Local Government Act 1972 as amended. Present public name included from the meeting was consideration of these items. I second you. Opposed and seconded. Before we close, Thomas. The recommendation on the first item. And we've got that to do. We've got one, consider report, discuss responsible investment activity undertaken during the quarter. And two, works towards publishing its first climate-related disclosure report for the year ended March 2020. That's all legal requirement, isn't it, Jo, from Medley, that we have it as itself? Not yet. It is expected it will come. Obviously, the calling of the election has thrown all dates and deadlines into the air, but we still think that that will come. So actually, to try and ensure we can get the work done if it does come in. Thomas, we could have been more clear. Did we have a show of hands on move to exempt session? Sorry? Did we have a show of hands to move into exempt session? I don't know how to get into it.

• Thank you. Amen.