The meeting was scheduled to include reports on the investment performance of the Camden Pension Fund, an update of its list of employers, its engagement work, and the progress of the London Collective Investment Vehicle.

Engagement Report

The engagement activity undertaken by the Camden Pension Fund, and on its behalf by the Local Authority Pension Fund Forum (LAPFF), since the last committee meeting was scheduled to be discussed. LAPFF is an organisation made up of public sector pension funds, and the Camden Pension Fund is a member. The report explained that LAPFF had been engaging with companies like BP and Shell on their plans for reducing their carbon emissions, and in particular their use of Carbon Capture and Storage (CCS). CCS is a process of capturing waste carbon dioxide (CO₂), transporting it to a storage site, and depositing it where it will not enter the atmosphere, normally an underground geological formation. The report explained that LAPFF had been particularly concerned about Shell's claim that it could use CCS to reach net zero, without having to reduce the amount of fossil fuels it extracts and burns.

CCS has been given prominence for, inter alia, gas (methane) for power, hydrogen for home heating, hydrogen for ammonia production and hydrogen for steel making. All of these have non-fossil hydrogen alternatives. It should be noted that CCS for coal was heavily promoted as a way of maintaining coal demand, but never materialised with the phase out of coal on economic as well as emissions grounds. There is the same risk with gas. The report also explained that LAPFF had been engaging with Drax on its use of biomass for energy production, and in particular the long term financial and environmental sustainability of this approach. The report explained that LAPFF was concerned about Drax's reliance on government subsidies and imported wood pellets, and that its commitment to energy security might be compromised by selling wood pellets when they were more expensive. "Also of note is this statement from the new Secretary of State for Energy and Net Zero, Ed Miliband¹ made on Monday 8th July 2024.

“In an unstable world, the only way to guarantee our energy security and cut bills permanently is to speed up the transition away from fossil fuels and towards homegrown clean energy.” Given that Drax supplies wood pellets from overseas, and UK forests do not have the capacity to make any appreciable alternative supply, there must be a problem with the term “homegrown”. The report explained that LAPFF had engaged with other sectors as well, including airlines, the cement industry, tobacco companies, water companies, and housebuilders. The report explained that LAPFF was particularly concerned about the long term sustainability of the cement industry, and the environmental impact of cigarette butts. Cement is a difficult to abate sector and the carbon emissions from the calcium carbonate will require some form of carbon capture and storage (‘CCS’)." The report explained that LAPFF had been engaging on human rights issues as well, and in particular with companies that operate in conflict zones. The report explained that LAPFF was concerned about the potential for human rights abuses, and had been encouraging companies to adopt stronger human rights due diligence policies. LAPFF is the Local Authority Pension Fund Forum. Ed Miliband is a member of the British Labour Party. He was leader of the Labour Party and Leader of the Opposition from 2010 to 2015.

Performance Report

The quarterly investment performance of the Camden Pension Fund was scheduled to be discussed. The report explained that the global economy exhibited mixed signals, with a slowdown in China's economy and stagnation in Germany's economy. The report explained that the UK economy remained subdued, while inflation ticked up slightly to 2.2%. Global equities experienced modest gains with the FTSE All-World Index rising by 0.8% over the quarter. UK equities, however, increased by 2.3%, supported by declining inflation and a weaker pound. The report explained that the Camden Pension Fund had a market value of £2.145bn as at 30 September 2024, an increase of 1.18% over the quarter. The report explained that the Fund was overweight to equity at 52% against a 45% target. The Fund continues to be overweight to equity at 52% against a 45% target. Multi-asset credit (CQS) remains at 15%, and the overall allocation to bonds, including index-linked gilts, continues to be at 22% against a 23% target. The report explained that the Fund's exposure to fossil fuels had reduced again this quarter, now representing 1.88% of the portfolio, compared to 2.10% in December 2023. It explained that the investment managers had also been asked what percentage of the portfolio is invested in the Carbon Underground 200 Index, a list of the top 200 publicly traded companies ranked by the size of their fossil fuel reserves. The report showed that the proportion of the Fund's portfolio invested in these companies had decreased from 1.42% in December 2023 to 0.97% in September 2024. It is important to remember that all companies have slightly different definitions of fossil fuel companies and so this is only an estimate. In 2012 the Fund had 7.2% of its equity assets invested in fossil fuels. In the report to the December 2023 Committee the fossil fuel proportion of all assets was 2.10%. This decreased to 2.09% as at March 2024 and further to 1.99% as at June 2024 and now stands at 1.88% as at September 2024.

London Collective Investment Vehicle Progress Report

The report provided an update on the London Collective Investment Vehicle (LCIV) and explained that the London CIV had made progress with a number of fund launches since the previous Committee meeting, and that total assets now stood at £32bn. The report explained that the Government requires local councils to pool a proportion of their pension investments, and the LCIV is the pool for London Councils.

This report provides a quarterly update on developments at the London Collective Investment Vehicle (CIV) in creating sub-funds for the spectrum of asset classes, on-boarding of assets and development of the CIV’s staff resource. Progress with the London CIV contributes to the Government’s pooling agenda and drive to reduce costs in the Local Government Pension Scheme (LGPS). The report explained that the CIV had also launched a number of new funds, including a Global Equity Value Fund, an All Maturities Buy and Maintain Credit Fund, a Private Debt Fund, a Nature Based Solutions Fund and a Real Estate Pooling Initiation. The report explained that two of the funds that Camden is invested in, the Baillie Gifford Global Alpha Growth Paris Aligned Fund and the Multi Asset Credit (MAC) Fund were on normal monitoring. The report explained that the CIV was developing a new policy addendum on human rights to its Stewardship policy. London CIV is drafting an addendum to its Stewardship Policy to specifically address investments with human rights risks in conflict zones. The report explained that the CIV is also drafting an addendum to its Stewardship Policy, to address investments with human rights risks in conflict zones. Stewardship codes are voluntary codes that set out a framework for institutional investors on how they should engage with investee companies.

Employer Register

The report provided an update on the employer register for all the bodies in the Pension Fund, and explained that admitted bodies made up 3.78% of the Fund’s overall liabilities at the 2022 triennial valuation. This figure has decreased from 14% since the Improvement and Development Agency left the Fund. The Local Government Pension Scheme allows the council to admit external organisations to its pension fund. These organisations are called 'admitted bodies', and examples include charities and companies that deliver council services. If an admitted body fails, the council might be liable for its pension liabilities.

This report updates the employers register for all the admitted bodies in the Pension Fund and relevant data for the Committee to review in light of their funding positions and scheme status. The report explained that there are three categories of employer in this data:

1. Scheme employers: bodies whose employees are automatically entitled to participate in the LGPS, also known as scheduled bodies. Examples include council employees in England and Wales, and academies established under the 2010 Academies Act.
2. Community Admission Bodies: mostly not-for-profit charities, but can also be bodies representing local authorities. They can be granted the right to participate in the LGPS at the Council’s discretion.
3. Transferee Admission Bodies: organisations who are contractors and provide services to the Council. They have been granted admission to the Fund by the Council in order to facilitate the contractor’s obligation to provide broadly comparable pension rights for Council employees who have transferred employment under TUPE legislation. TUPE is the Transfer of Undertakings (Protection of Employment) Regulations 2006. The law protects the rights of employees when a business is transferred to a new owner.

The last Community Admission Body admitted to the Fund was in 2006.

There are three categories of employer in this data: • Scheme Employers – bodies whose employees are automatically entitled to participate in the LGPS also known as scheduled bodies (e.g. council employees in England and Wales, an academy established under the 2010 Academies Act etc.) • Community Admission Bodies (CABs) – mostly not-for-profit charities but can also be bodies representing local authorities. They can be granted the right to participate in the Local Government Pension Scheme LGPS at the Council’s discretion. • Transferee Admission Bodies (TABs) – these are organisations who are contractors and provide services to the Council. They have been granted admission to the Fund by the Council in order to facilitate the contractor’s obligation to provide broadly comparable pension rights for Council employees who have transferred employment under TUPE legislation. The last Community Admission Body admitted to the Fund was in 2006. The report explained that the Pension Shared Service (PSS) had introduced new software, called 'i-connect', to help employers return accurate data, and an Employer Relationship Module to hold key contact information.