Transcript

The democratic services and monitoring the chat during the meeting as well. Tonight's meeting will be recorded and broadcast live online. The recording may also be used for quality and training purposes. Please bear this in mind to your surroundings and you may wish to use a backdrop if you are appearing remotely. In about 10, I'll start the countdown before we go live, just to make you aware. Yeah, we'll go live about 10 seconds. Thank you. Good evening and welcome to this evening's meeting. I am Councillor Martin Bailey, Chairman of the Punchings Committee. Members of the committee are attending this meeting in person at Lambert Town Hall, however other members, members of the public and officers are joining us both in person and remotely. The meeting is being recorded and broadcast live. This recording of tonight's meeting may also be used for quality and training purposes. Whilst we hope everything runs smoothly, please be patient if we hit some challenges in this hybrid environment. In the event that technical issues require the meeting to be adjourned and it cannot be restarted in a few minutes, further updates will be posted on the Council's DemocracyX account, which is @LBLDemocracy. Fire exits exit the room from either door and go up the stairs to the street level and toilets. There is an accessible toilet just out the right hand side of the room from the public gallery view. I will now introduce members of the committee in alphabetical order. After members and the committee have, after members and key officers have introduced themselves, I will explain how tonight's meeting will be managed. I'll start the roll call by starting to my right, asking Councillor Scott Ainslie to introduce himself. Good evening. I am Councillor Scott Ainslie. I represent Streatham & St Bernard's Ward. I'm a permanent member of the Punchings Committee. I'm Simon Hanover. I'm Assistant Royal Secretary of Lambert Unison. I'm Peter Woodward. I'm here as the representative of the pensioners on the Punchings Committee and I've got no security interest to declare. Councillor Joanne Simpson. I'm a member of the Punchings Committee. Thank you. Thank you. Thank you. Report which are to be debated this evening will be presented by an officer who introduced themselves at the time and highlighted their main issues. Members of the committee may ask questions of officers and we will then debate the report. We do have quite a packed agenda this evening so if I could ask members of the committee to keep your questions tight and contributions I would give more leeway to new members of the committee. But I do have a lot to get through this evening. I would now ask members to declare any pecuniary interest on items to be considered this evening. Do any members have any pecuniary interest to declare? I would also like to confirm I have no disposable pecuniary interest in any matter to be considered this evening. However, I would like to confirm I was asked to join the local government pensions committee and I have accepted that invitation. Item number two, minutes of the previous meeting. We now turn to minutes of the last meeting. Members agreed that the meeting minutes for the meeting of 10th of July are accurate record of discussion. Thank you. Those were approved. And I'm also doing the private minutes as well. Yeah, can I ask that also the private session minutes are also an accurate record of discussion. Thank you. So we move on to item number three, matters of wiseling and the work plan, which we are asked to vote. Yeah, I know they're not here, but we haven't mentioned it was intended to bring the housing fund manager to the Knight Portoba committee meeting to answer any further questions members had. That's not on today's agenda, so will you please explain why? Apologies, that is an oversight from the chair. We did report back to the whole committee. Myself and Peter met with the housing fund, the London Civ fund housing fund manager early in the summer to understand some of the concerns that had been made at full committee. We were satisfied with those made in that engagement meeting but we did promise to invite the housing fund manager to a future committee meeting. This is a patch agenda, but apologies that I didn't prioritise it and didn't chase officers away. We will look to get that on a future agenda item. It will be soon though, yeah? Yeah, we will build it into the work plan. Yes, thank you. Are there any other questions on the work plan? As noted on the business plan tracker item 4. Last to note, are there any questions on that? I would like to thank officers for getting the retenders now on the way after my pushing for many time. Appreciated, but any other things to raise? If not, I will move on. Very good. Item 5, committee members will remember we've moved the main chunk of this item into private session just so it allows that we're not having duplicate conversations. But I invite Saul to introduce the paper and anything you want to have in public session. Thank you, Chef. My name is Saul, head of treasure and patience. Just a very brief observation, as Chair said, this item will be discussed in detail in the private session. The fund increased by 1.2% over the previous quarter, increasing about 22 million to the overall portfolio. The fund slightly performs over the quarter across all tenors, delayed because of our performing property portfolio fund. The funding position increased to 118% from the previous quarter, which is good news for us. That's all really briefly, given that we want to be discussing the fund in detail in the next session. Thank you. Any questions or comments from committee members? Peter? Yeah, I'm just surprised that Saul said it's good news. I mean at 2.7, as of 30 June 24, the fund underperformed the benchmark in all reporting time periods, measured up to five years. I've been in this committee and its predecessors for the last 30 years, and I've never seen quite such a damning report, and that's since 1995 to date. And I mean, we might have gone up 1% this quarter, but our benchmark went up 1.6%. We've actually, relatively speaking, gone down. So how's it ever got quite so bad? I'm not sure. Somewhere, somewhere along the line, we're doing something wrong. Good question. The good news is on the funding position, which is slightly different from the actual funds. So I have noted that the fund has outperformed across the data. What I'm referring to 1.2% is as compared to the previous quarter. You're absolutely right. Across all tenors, the fund is not doing well as we would like it to be, terribly. So just follow up question would be, what is the advice later, but what is your request of our advisors regarding this performance? I will invite the advisors themselves since they are in the room to respond to us. But ideally we will be calling out our main fund manager. That's the LC at some point, give us a detailed update on why the fund has been cost the majority of the funds that are underperforming the land and sea. If I may share, I completely get that. But what is your ask of them about this performance? I ask all of the LC is to explain to us why the mandate that we are signed up to has promised us to perform at a certain level is not performing at that level and what they are doing, bringing to recalibrate the performance of the fund to that level. I know that in our conversations, behind the scenes conversation, officer to the fund conversations is that they have been difficult touches in terms of fund managers, the underlying investment managers on stock selection, for example. Some of them are now turning a corner for the overall direction of the fund. As I noted, even though it is still under water, it is improving, but it's not improving as fast as we would like it to fully. My ask for them is, can they accelerate that process and what are they doing to hold the investment managers accountable and to make that process much better? What I'm getting at is, should we be asking for a new strategy? What is our ask? We are due for a new strategy. In one of the items that has gone before us, the value valuation out of which a new investment strategy comes out is due to start next March. We have had preliminary meetings with the actuary. Out of that, we will use a new investment strategy. At that point, we will look at all of how the fund has performed this far to see what we can do. However, we have to be mindful that this is a much worse fund. That means we're not going to be taking unnecessary risks in order to get higher performance. And to be open to its ability to pay its specialness, their benefit. But it's a balancing act, and that means sometimes we make steady, slow progress rather than shooting to the moon. Thank you. But it's steady, slow progress down, I guess is the concern. You haven't said anything that's that's going to make people feel better about the bad state of the fund this evening. Although obviously trying to get a better sense of how we might be able to shift the strategies is welcome. I guess I've got two questions. One is, what is the benchmark like with other local government funds in Manberth? Are they also underperforming the scale or not? If they're doing better, why are they doing better than ours? That'd be the first one. If you don't have the answer now, then the next committee meeting. I guess the other one is just in terms of the actuary position, which is that, you know, is there a point at which there is a red alert crisis moment? Are we close to that? Not. What's the what's the scope here in terms of because these numbers keep on going down? You know, like at what point do we have to start having very serious discussions about about liabilities? Your first point, first question. Looking at ourselves vis-a-vis the other funds might not be performing at the same level because we don't have the same exact investment strategy. On your second question. You have the actuary in-house today. But I believe that the plan is in good shape because, as I say, our funding position at present, as at the end of June 2024, was at one hundred and eighteen percent. But I welcome the actuary to give his. Whether or not the fund is at a large position or not. So it's easy to confound the benchmark that you set your managers and the health fund. I've set the discount rate, which is the target that we need the assets to achieve. That is around three between three and four percent per annum that we're trying to achieve investment returns. Most of the benchmarks, especially when you look at your equities, are going to be tied to the FTSE or some other S&P 500, whatever you're actually going to use. There's a big district there. I'm setting that target over a very long period of time. And the fund has achieved that target even since 2022, which is what really matters for contributions. That's one of the reasons we're seeing that funding level go up. So I'm not concerned. Myself, the low and steady wins the race and pensions. You might talk a little bit about benchmarks. So the discount rate is different then. The key issue here is the underperformance relative to the benchmark. Primary drivers that are most of the funds are held with London CIB. So I guess in this pooling environment, there are limited options. Now, one option we were thinking with the Upcoming Investing Strategy is you currently have active managers taking out positions and taking active risk. That's perfectly valid. And to give you that to your investment belief, you can continue to do that. I suppose the question is, when you have 80 percent funded and you need to try and cover the deficits, do you want to take that additional active risk to try and recover the deficit? Now we're well funded, 118 percent. You still need to take that active risk. Or do you want to maybe invest more passively, which then means you're probably just going to be achieving that benchmark return rather than taking that decision. There are pros and cons and tradeoffs. That's certainly one decision for consequence. The other couple of areas that have tried recently on relative performance has been the property. You've already made a decision on taking out property. We've also made a decision to give the UK a rent sector a bit more time. So we have taken decisions, they've made changes. So the next best strategy would be to do with some of your active equities, whether or not they remain appropriate. In the wider context of, you know, we're trying to achieve the sustainability as well. This is a long game. You can have a kind of performance. But we do need to know when enough is enough conversation and just add one further point to that. There has been one drag, a drag on absolute numbers, actually, over the longer term. And that's your liability driven investment portfolio, the LDI portfolio. That's basically a government bond portfolio. So you can see that's bred across the line. But that you have to remember, what was a smaller portfolio. We've made that bigger more recently, but made that portfolio bigger when interest rates were higher. So we've increased the size of that, as it would alter a better rate, better price. And that's that we're actually producing, kind of locking in some of those funding gains that we've experienced. So whilst I'm not I'm not trying to be an apologist for the performance, I think the thing in pensions is assets and liabilities. And actually, if you look at both of those together, you are actually in a good position. But that's not to say there's not areas that also there are areas that need attention. Yeah, I hear everything you say. And this is why we really do want to have a list of the comparisons of the rest of the London boroughs who are also all in the SIF. I mean, if the SIF is producing rubbish, then it's rubbish. And I'm not sure why we're in there, but we know I don't like it. But so if we can get the comparator with the London boroughs, that will evidence with you or whatever and point to the SIF being rubbish or to something else. That's why we really do want the comparator with the other 32 boroughs. Didn't we do that last meeting? You did. Yeah, that is that is pulled out when we did some of that on our position in the universe. That is an appendix to the last. London boroughs. Yes. It's not just London, but I appreciate maybe, I appreciate there might be, there might be anything. But also, I think it's prudent to remember every London borough, despite maybe all having the relative amount in the SIF, all have different investment strategies. I understand that, but we're all in a similar place. We're all in the same universe, we're all in the same pond. I mean, if we're all rubbish, then it doesn't look so bad. If they're full of rubbish and we're doing less rubbish, then we're doing quite well. I want to know that comparator. And again, to echo the points you get, there is a, this is a long term, we are investing for long term, it is frustratingly often to focus on quarter by quarter results. Now, this is fine. Yeah, sure. But it's simple. Yeah, no, I do. It's going to beat this pattern. And is there any more contributions on that? Quickly, I'd like to move on. Yeah, sure. Again, I'd share. Thank you. So our exposure to indirect exposure to fossil fuels, despite the fact that we decided to divest some time ago, I noticed later on with the papers, we are trying to get out of that. I mean, at times it's been one percent, less percent. Still, at the moment, it's down to nine point six million. It was at twenty one point twenty one million. It just seems to be taking an inordinate amount of time. I understand things move slowly in the French world, but. So there's not really been a deep dive into how we start extracting ourselves from that. They're stranded assets, are they? I mean, I think we've had this conversation before, but I thought we were still moving towards all indirect investments. All our possible exposure is indirect. We have no direct exposure. So often those fluctuations will just be because of those market valuations as they go up. And I'll turn to Saul to expand on that. I mean, as Chairs has said, even the intricate nature of investments, just by association of different entities operating in the same sector or industry or country. You. It's almost practically impossible to get rid of that element because an organisation needs to do something and will need some of another company. And that collaboration is where this indirect exposure comes. But we are not actively investing in fossil fuels. Sure, if I may just press one. So I notice later on in the papers. Can I just take over your phone to private session papers? I think you are. OK, OK. I realise it's it it sounds as though the committee, the officers are trying to act on getting out of indirect investments. And given that we're going to have a deputation later on how our money is enmeshed, our finance are enmeshed with with fund managers, that we don't really know what's going on behind the companies and the complex relationships. I get that it would be it would be good to see a pathway out of that indirect investment to. I'd just like to have that registered on the minutes. Thank you. Thank you. If you have no further questions on that item, those recommendations are noted. Just sorry. This is not a big louder. That's fine. But just to remind us, this is not a public meeting. It's a meeting public, but we will speak up. Page 36 General update. I'll ask Saul to review this item. Page 37. Thank you, Chair. Very brief remarks on this item. Notify committee. You might have noticed one of your colleagues is not here. It's a staff representative. And the elections are underway for his replacement. Again, as I alluded earlier on, we have had preparatory meetings for the Tranio evaluation, which starts next year in March 2025. Again, during this quarter following new government. The idea there was a patient review all for evidence which the fund submitted the chair. Hopefully help us to meet that on time. I think that's all that I would like to point out from these some items might. Be addressed in the next item, perhaps, but I'll talk about that for now. Thank you. Just move for contributions. If there are pressing comments on the students report, you can do those now. But I'll ask otherwise just in the interest of time if people can write to myself and Saul prior to the 31st of October with comments on the studentship code report so that we can incorporate those comments on the response to the pensions review. Hopefully committee will appreciate the consultation was the shortest time government allows a consultation to be. And so you'll appreciate it. I didn't write around equally. The consultation was launched the day before on a holiday and closed the day I came back. So I didn't ask the time to write to you all. But hopefully, noting Peter's comments and others comments, you'll be appreciative that we were quite strong in that. One thing is the ability for underlying authority to have to invest in any pool and not just be restricted to and for various reasons. Most were both unperformanceful. So if we believe there are other pools doing products that are that we want to do, we shouldn't be we shouldn't be having to bang the door of the civil and we could invest quicker into another pool, essentially. So that that that was the main crux of our response to that. But are there any other questions on the general update? Yes. So the this seems to be really consistency in the uptake of members training. Got new members, obviously. The. So I just say it just means that it's quite difficult, I guess, for the you know, that we're forming our duty within the rules. We'll sit for guidelines when clearly some people are doing the courses, some others aren't. So what what are we going to do to ensure that we get some level of consistency? So I think it's more helpful to note this is the training log. It records up to July 24. Members of the committee have undertaken the various are in the process of or have undertaken those various lower modules and are doing those so that that those columns, I would expect to be fuller next quarter. Equally counts raise the wall. Your own column against external events is also empty. So it's a call to all of us to do more as opposed to bring out others. And you will see the suggested training logs. We did have a discussion last committee around trying to organise formal training in between committee. And I think that it except some have made that challenge to really organise. But we will take that away to try to get more formal training sessions in so that we can come together as a committee outside of. Committee meetings to do the appropriate training. But but yeah, this this this log as is this log as presented is essentially already kind of six, eight weeks out. A question on the agenda. So we have the deputation, so 6A on the agenda is is the deputation. But I can see that probably relates to Appendix five, which is in this part of the agenda. So will we hear from the deputation and then discuss Appendix five? Yeah, yeah, the deputation will follow the jump. This this this point, the general update. Yes, it's just he was higher up in the agenda and it would be skipped over. The other deputation is still coming. The other contributions grant. Great. I will note and agree the actions out on page 37 and move to item 6A/7 depending on gender reading on the deputation. So could I invite Lambeth Unison to make the representation regarding Israel and ethical investments, please? Which one? So I've got five minutes for a combination of Unison, the Lambeth divestment campaign and retired pensioner. I understood there is a separate one for Glyn Secker. Yes, that's right. So yes, Unison, a combination of Unison, Lambeth divestment campaign and retired pensioner have five minutes to make a deputation. Hi, I'm Jocelyn. Please feel free to sit down if you want to sit down. If you feel more comfortable standing, that's totally fine. I'm Jocelyn. I'm Lambeth Unison and I'll speak for two and a half minutes and my colleague Shaeeda will speak for two and a half minutes. So we'll take about five minutes. So I don't have to tell you what's happening in Gaza at the moment, but that war hasn't been happening since October the 7th. It's been there since 1948. And that was also the time that I'm coming from South Africa and that is when we were also racially divided and that Palestinian land was occupied in 1948. So our demand is clear, Lambeth Unison. There's been political pressure on Israel, diplomatic pressure and there's been judicial pressure. And I'm proud here to say that South Africa took Israel to the ICJ. And so those things need to be implemented. We are clear that that needs to be implemented. There has been military pressure as France has stopped supplying Israel with weapons. But the pressure we feel in Lambeth is that Israel needs to be stopped and the pressure will come from financial means. Lambeth Unison demands that the Lambeth employers in the fund, the money that's invested in that fund, needs to be totally digested from all companies that deal with Israel. We want you to act on this today, to agree to support reporting to the next committee, all its holdings and to the meeting to divest. We do not accept a promise to do something without a timescale, nor do we accept that the UN list of companies which operate in the illegal settlements on the West Bank is sufficient. It barely scratches the surface. We demand a clear plan from this committee on how our pensions will be digested from apartheid Israel and the committee to work with Lambeth Unison. We know that this can be done. Nelson Mandela came to Lambeth and said thank you for divesting from apartheid South Africa in the 80s and the 90s. Many, many councils have divested from Russia, from fossil fuel companies and it did so quickly. These divestments can and also should be enacted through the central investment vehicle, the surface. Arguments that you have a duty to look for the best return to do so, do not wash with Lambeth Unison. We do not believe that only companies that deal in Israel's economic economy can provide the best return, it is not sold. So we are very angry at Lambeth Unison and we want these monies to be coming out of Israel or is using these monies to buy weapons in the sense of an interest in Palestine. Thank you. You've got two minutes left of the five. Thank you. Unison calls upon you to divest from all Israeli companies complicit in genocide and not just the 112 companies in the UN list. We come to you today and say do no further harm with our pensions and repair the harm that has been done in our name with our money and divest from apartheid Israel. It can be done. The UK's largest pension fund, USS, sold off 80 million of its assets linked to Israel due to pressure from its members. In January 2024, the ICJ ruled there is plausible evidence that Israel committing genocide in Gaza. The UK, as a party to the Genocide Convention, has a binding obligation to employ all means to prevent and deter further genocidal acts. In July, the ICJ issued an advisory opinion ruling that Israel's military occupation is unlawful and must end and that Israel is committing the crime of apartheid. Reports have found that all states are under an obligation not paid or to assist this unlawful situation. Therefore, councils must divest funds from companies enabling Israel's war crimes, including arms companies supplying Israel with weapons and companies conducting activity in its illegal settlements on stolen Palestinian land in West Bank. We asked landlords to comply with its ethical investment policy. It's beyond dispute that the Israeli government has set out to eliminate systematically every aspect of Palestinian life in Gaza. We hear testimony from doctors returning from Gaza, such as Dr Mark Perlmutter. I have had children that were shot twice directly through the heart and side of the head. No toddler gets shot twice by mistake. Occupation dehumanises the occupier and the occupied. Lambeth Unison demands divestment from us of our staff pension. Five minutes, you could finish your sentence, please. Divestment of our staff pensions in genocide, artite, epicide, scholasticide, domicide and herbicide. And as Dr Martin Luther King said. The time is right to always do right. We want to be able to say to future generations in Lambeth, what did you do when the genocide in Palestine was happening? And we said, divest, divest, divest to our Pensions Committee. Now invite Glenn Secker to make representation. Five minutes, Glenn. Thank you very much. I've lived in Lambeth for 40 years. I've worked for Lambeth as a social worker for about 14 years. I'm a Lambeth pensioner. I'm Jewish. My grandparents fled the pogroms in Poland and Romania. Vanessa, my lifelong legal partner, worked in Lambeth, setting up and running the child minding team in children and families. We're given a lifetime of service without discrimination. She was the daughter of a Holocaust survivor. My mother was sent here alone as a girl on the train from Austria. The rest of the family perished in Auschwitz. Our two children are therefore Holocaust survivors, one of whom is a registrar now at St Thomas's down the road in A&E, delivering a service without discrimination, of course. October the 7th was a true crime against humanity, but it can only be understood in the historical context cited by the General Secretary of the United Nations, Guterres. But it started not on October the 7th, but with the occupation in 1967. I would actually reference 1948, an expulsion of Palestinians through cause of a million then. Over the decades, there have been 17 fruitless peace talks during which life for Palestinians has become unbearable. But it's the story of Gaza with its original 1948 refugees, which is at the core. Hamas, originally promoted by Netanyahu to divide the secular Palestinian movement, won the Palestinian elections in 2006, declared fair by international observers. Hamas offered to end hostilities in exchange for a Palestinian state alongside Israel, but it was forcefully ousted from the West Bank in East Jerusalem, though it survived in Gaza. Israel then imposed the blockade of air, sea and land, restricting supplies to Gaza of food, water, medicines and medical services, and bombed essential services and civilians about every four years. If Israel had been so blockaded for 17 years, 17 peace talks had all failed. No one in the world would have criticized them for using force to obtain freedom. It's fitting in the middle of Brixton to give two examples of context. The Haiti Slave Rebellion of 1791, the defining battle against slavery, in which some 25 to 30,000 white French villagers, including women, children, babies, the elderly, were massacred. It was a crime against humanity, but no one today would deem to describe it as an act of terrorism, because it's placed within the context of slavery by the colonial powers, France and England. Similarly, no one would describe the rebellion by the Mao Mao and the massacres they carried out against British colonialism in 1952 as terrorist. October the 7th came out of the brutal 57 year occupation. Similarly, it is the occupying power that bears the final responsibility. We are horrified beyond words by what Israel is perpetrating in Gaza and now in the West Bank and Lebanon. Israel is destroying every dimension of life in Gaza. 45,000 murdered. 186,000 if you take the Lancet figure. 16,000 children. A further 20,000 if you take the Save the Children figure. Nearly all hospitals deliberately destroyed, likewise schools. The drinking water system, the sewage system, the power system, life threatening diseases are now rampant with no treatment available. The Genocide Convention defines five conditions under which actions qualify as genocidal. One minute remaining. Israel in all probabilities, the ISAG, as the International Court of Justice ruled, fulfils all five. What Israel is doing is not in my name. I am not and cannot identify with Israel. I am, as very many Jews say avowedly, never again for anyone. It is not antisemitic to criticise Israel. My criticism comes from my deep belief and my family's belief for what it means to be Jewish. Israel cannot, under international law, claim self-defence when it's the occupying power, but notwithstanding that, it is also violating the law of proportionality. If Israel stopped its attack on Gaza and withdrew, Hezbollah would stop its attacks. Israel, with its extremist leadership, is generating a Middle Eastern war, but won't listen to fine words. It would only pay heed to concrete pressure, and that means stopping financial support and especially the finances supply of arms. I cannot say how deeply distraught I am that my pension includes profits from companies which supply my pension. I call on you to implement ethical investment practise that you and your last report noted that was taken against the Chinese wages. I think it was page 119. I have the human right not to be implicated in this genocide. Thank you for those deputations. If I could ask, so committee members will see that we, after the question at the last meeting, work was undertaken by officers to identify our exposure to the 112 business entities identified in the UN report. And the details of those are in Appendix 5 of your agenda items. We have minimal exposure to two of those companies and neither of those companies are Israeli companies, they are multinational companies. One is New York headquartered, one is French. Those are telecoms and transportation companies. Alstom, for example, provide the rolling stock for the Northern Line by doing the signal upgrade between Victoria and Brixton. The total sum of our exposure to these companies comes to £250,000. Those investment exposure is found within two funds. The M&G Alpha Opportunities Fund where our investment totals £145 million in that and of which our exposure to 112 totals £60,000, 0.041%. And then the Elsib MAC Fund where the M&G is CQS, which our investment in that fund is £182 million. And the investment to Altice in that is £191,000. So that is where we are in terms of our investments into companies on the 112 business list. Before I invite committee members, I'll just ask what was there's anything else they wanted to add? I will ask for contributions from committee. Can I remind committee, we're not here to discuss our first duties, discuss the financial interests of the fund and I'm not taking contributions on opinions on the Middle East, fundamentally, in terms of that. The contributions will only relate to our investments and the position of the fund. And I will cut you off if I feel you're straying. So are there any contributions? Thank you very much. Thank you to the deputation as well for their comments. It seems to be Appendix 5 does lay out a very small investment, totalling £250,000 or so. In two of the 112 businesses that have been identified as operating within illegal settlements on the West Bank, which, as the speaker said, are illegal under international law. So it would seem to me to be a small matter of such a small amount of money to remove all of that money post haste. I don't see why we need to have quarter of a million pounds invested in these companies. I know it's only a small amount, as has been explained by the chair, but it's shocking that there's any money invested in that sense in such operations. But what I would challenge is the argument that there was only looking into the 112 businesses identified by the United Nations Human Rights Council, because what we are talking about in terms of the ethical investment strategy. Is a much wider question, like it's not just these two companies that have been identified, it is about being able to have an ethical investment, which our members, which the staff at the council and the other people who pay into the Lambeth pension fund, will be able to understand is an ethical investment. And we already have policy on that. We have agreement on that. So there's a much longer list of companies here, which involves everyone from Rolls-Royce to Ford to Google to Hyundai. So, you know, there's loads here. And what I think we really need from the officers is an understanding of the exposure into these companies, not just these two companies here. We need to have an understanding of the exposure into these companies. Where does this list come from? This is a list based on my own independent research. But nevertheless, this should be a list that for the accountancy and transparency of the pension fund, it would just be good to know if we had any investments in these. OK, well, I can I can send this to you, chair, and have to look at the list. I'm just I'm happy to look at this. I'm actually look at this. Are you happy to look at it? Well, I'm I'm asking for transparency and accountability. So off the list that you've devised of your own volition. So, I mean, maybe maybe we don't have investments in any of these companies. Maybe maybe our hands are completely clean in that sense. But if we've got any money invested, just just for accountability, we need to know if there's any money in these companies. Why those companies in particular? Independent research. Should I pass it around, chair? Please pass the list. Other contributions while the list makes its way to me. Sorry, I just asked for a timeline on this. It would be good to get this for the next pension committee, or at least as much data as we can guess. I mean, irrespective of what's going on in the Middle East, it would just be interesting to know if we had any investments in these companies. You ask us notes and we'll come back to it. Councillor Coe. My question was just that if we are looking at a future investment strategy at some point, and we have lots of countries in which we are investing in, I mean, I think that if we look at what's happening globally, we could say, for example, that there are many countries like Saudi Arabia who are committing atrocities that we need to look into. We could probably look at the Middle Eastern countries who have killed lots of Palestinians that we need to look into if we're investing in them. And also, for example, the US, you know, who are quite high on the death penalty. So there is a whole range of countries who we should look at. And I think for the sake of transparency, it'll be quite good as part of a future strategy and that we can be transparent and look at a list that officers have brought up based on those companies. And I'm quite new to the pensions committee. So personally, for me, it'll be quite useful. So I do want on record that I think we should be looking at countries widely and not just be very specific in one country because, you know, there aren't many countries who are very unethical. And I think the sake of transparency, we need to be able to understand who those are. And so that in future meetings when we are not going to have one country at a time. So that's what I think would be the best way forward. Thank you, Councillor. Peter. I mean, actually, here in Lambeth, we've got a proud history of disinvestment in South Africa. You can't disinvest in everything that's bad because you just wouldn't be able to invest any money. We will be in this capital as well. But there is a genocide going on. It is apartheid. However, that's the other side. I know the leadership of this council doesn't want to spoil our brother sister Palestine, but I must remind committee, the money in the pension fund is not the council's money. It is the money. This is the deferred salary of the staff and members or whatever of the council. But it is not money once it's put into the fund. That's why this committee does not answer to the central committee of the council. This committee stands alone. This committee is what decides what happens to the money of this fund. This is not the council's money. It is our deferred salaries. So I mean, just get that right. That is not the council money. Something it is, but it is not. And I say it doesn't mean we have to remember that. And I mean, as the pensions rep, I mean, in the last few months, I've consulted with loads of people who are fellow pensions, whatever. And I was chair of Lambton for 11 years. So I've got quite a lot of contacts with them. Not a single one. This is just Jews and Gentiles, not a single one of those actually is confident that we are actually should be best in this or not. Well, and I think people here will actually accept that. I don't want to totally dismiss all of our assets and support Israel. I'm grateful because we did ask for more information. But what we've got is how we've only got this hundred twenty two hundred fifty thousand pounds. I'm grateful that we've got that two hundred fifty thousand pounds there because that is assets in what? In international law. What all British governments of Tory coalition and Labour claim is an illegal occupation. There are currently eight hundred thousand illegal settlers in that. And we are investing in illegal settlements. And, you know, that is right. It's not just like it's illegal. British law says that these settlements are not legal. We do not recognise the Israeli possession of these settlements and therefore we should not be investing. So that's a very clear legal and we have fiduciary duty to actually have our investments sensible. It is not a good investment to invest in an illegal settlement, investing in stuff that's illegal. If I invest in a poppy field in Afghanistan, we will be very distressed. You're not aggressive, Peter. Can you confirm? No, but this is the point. It is. It is. We have. I mean, I want to divest everything from Israel, but certainly we absolutely have to stop that two hundred fifty thousand pounds immediately. You say it's only a small part of one hundred forty four billion lemon g. So we've got three or four hundred million pounds invested in these management's investment managers who are invested. So we've got a lot of clout. We can tell those that with that four hundred million pounds worth of our assets, we could tell them get out of those companies or tell those companies to get out of the West Bank. We have that power. We have four hundred million pounds invested in those managers. I think that's the number you gave. One hundred forty five million for energy or whatever. We have clout and we must use that clout. It is not fiduciary responsible to invest in a war zone and in the illegal settlements. And we have to get out of it. I don't know for one more to say, but you'll shut me up because I'll go off the bridge. So I'm not as well. Just to pick up on Peter's last point. Not only have we gone against our ethical policy, but we've gone against we've failed in our fiduciary duty by keeping whatever investment we have in these occupied territories, because you can see the results themselves. I just cut off to be very clear. I didn't say I didn't pick up directly. These are not illegal investments. These are not investments. These are not direct investments in the occupied territories. These are small investments in companies that at some point have operations which also include building roads in Israel fundamentally. It's not defence sector companies. And we have no proof to actually realise our investment might actually just be the train pulling into Stockwell station right now. So there is fundamentally very clear that investment is not in the illegal settlements of the occupied territories. Can I take from that, chair, that you are advocating a continued policy of... There is no recommendations as paper time. We're noting the contents for her. We're noting the contents. Well, can we have a vote on this issue? Could we, as the committee representing the members, and may I remind you that we did a responsible investment survey of the membership last year. In that, we promised that the committee was keen that going forward, members' views can directly feed into the implementation of the new strategy. The drafting of the responsible investment policy and the general improvement of stewardship reporting. That's what we promised then. Can we deliver on that promise? Can we fulfil? What do you want people to vote on, to be clear? I would like us to make a direct vote on what the offices have identified as direct investment. Investments in occupied territories, according to the United Nations. Can we have a vote on getting that money? To be very clear, what you're asking is a significant investment decision where you're asking us to exit two funds to the value of over 325 million, equivalent 20% of our fund. You're asking us to basically put the entire surplus of our fund at risk while we exit these two funds with nowhere to go, so that money will lose value as it sticks to cash somewhere while you find it. It's lost value. With the valuations of those exposed to those two companies has come down. As you look at an item in the investment management report, these two funds are actually one of the few performing over benchmark for us. You're asking for a vote on exiting 20% of the fund, it's not a £250,000 decision you're asking, you're asking for a £326 million decision, a significant investment decision, you're asking to raise some tonight, and that money has nowhere to go. I just want to make this point, that what we've got here as well, in addition, and we've got a stewardship report that we've just glossed over because we've accepted the deputation, where we state so many things about reputational risk. Where we are at the forefront, we are the stewards of responsible investing. We are actually doing, saying great things in this area. You know, we've been cited on many independent, Lambeth are doing a good job on this, and we've already heard tonight about our history, our proud history of taking these stands. We have a reputational risk here. I mean, what if we get to a stage where the International Court makes a ruling that everyone who's invested will be complicit in investing in this unhumanitarian occupation is complicit, and therefore not only do we have a reputational risk, what comes from that? What comes from being judged to be seen to be complicit in illegal settlements, for example? Right, I think I answered part of the question. I didn't say we actually pull out of £325 million under found management. I made it quite clear. No, excuse me. This is, I think, an answer to Councillor Amos' suggestion. What I said we should do is we should tell them to disinvest on these companies or we will pull out of them. That's an option. And that's the process. We tell them very clearly tonight that they withdraw from those investments or we will leave them. We've already been discussing that actually we're not very happy about forwards anyway. So even though they might be companies that are doing relatively not so badly, you know, we are going to be reissuing our investment guidelines. We are going to be reissuing who we're going to be doing business with and make it very clear to them that if they do not disinvest in these companies, they will not be on our list of people that we're going to invest with. That is the way that we avoid that particular issue. And it's not a problem. I mean, it would be ridiculous. I totally agree with you. We can't just pull a quarter of a million pounds out of them. That's nonsense. No one suggested we do that for a minute. But we tell them tonight, pull out or we pull out. Yes. Thank you. Other members have any contributions? So fundamentally what I'm hearing is you were asking for further engagement with the managers, which is what I'm happy to do. Not just engagement, a statement. They pull out or we pull out. And either or. That's what I'm asking for. That's what I'm asking for. We remove our investments from the illegal settlements. That's what we're asking for now. Just a question, because you mentioned about 20 percent. And so for me, that's quite worrying if we're already saying that. So I think for me, I kind of feel that I need to understand all of this and I don't know whether someone can actually. Yes. Thanks. Your first meeting. Your first meeting. Because if it's asking to pull out and they say no and then. No, no. Because we would do that under advice. We would do that under advice from our advisors. If we if we make if it was at some point made to exit the entire fund, there would be a process where we have to join a queue and I don't know how long that queue would be, for example, to exit the fund, for example. Also, we haven't done the work to identify. You shake my head. There's not a queue. There's a queue. We're still waiting. I'm waiting. We don't know. I'm not explaining the process. We made a decision a year ago to exit European property. It was a two year queue. I do not know how long the queue would be to exit this fund. That is a fact. They're still waiting to exit. We're still suffering in a queue exiting European property. That's the fact. So I do not know how long I do not know how long it would be to exit these funds. What we then would have to do in professional advisors would then be to find appropriate vehicles to reinvest our money into. During that time, the money could fundamentally sit as cash and each day as inflation goes up, it loses real time value. So that is the financial risk. Fundamentally, we meet four times a year and that is a decision. I'd like to correct you on that. Yes, sure. So this is a very complicated and sensitive issue. I obviously understand everyone's passions on this. Just a couple of observations now. It's very complicated area, but we're very happy to give you this advice. But a couple of initial observations. Firstly, as the chair had pointed out, you actually at the moment, the only way you could actually exit these two positions would be to fully sell your position as you don't. There would be a lot of considerations that not least transaction costs. We don't we don't have that information. So the committee could not make an informed decision on that this evening. The second thing I just have in my experience working with other institutional investors is that generally they use divestment to affect real world change. Because if you just divest these companies and sell them to someone else. Yes, you've washed your hands, but you actually haven't affected any real world change. Company still exists. Just someone else owns the share. So normally by those investors who have a particular ethical issue or a responsible investment issue they want to pursue. Normally when they start that process is they would engage through the London. In this instance through the London Sieve, through the fund managers with those companies to ask these two companies that have been listed in the first instance. These can you explain to us how you have business activities in the occupied territories? Do you want what's history to that? And then to lobby the companies to say, if this is an area that you don't want to have these activities there anymore, to lobby the companies on those. But to say to them, if you do not react and if you do not affect change to pull out those activities, then we have the intersection of divestment. That's normally how investors look to use their power to actually affect real world change rather than just. We have choices. Yeah. Thank you, Simon. So the proposal is that we write to these funds as Peter outlined and make clear to them, because the information that we have been given about the investments into even if they're historic investments or ongoing, it's not clear into legal settlements and legal economic activity in the West Bank. We want those investments from that fund to end. And if they do not, then we will begin to take steps to just divest from it. Not just the West Bank. So that's the question. I know you said you'd rather have your face different way. Well, it's kind of it. I think that's what we're saying about this particular issue. There is also the issue that I raised, which is about getting much clearer data on the rest of these companies. The next committee meeting. Take a second to take your first point, fundamentally, and supportive of further engagement, which is what you're asking us to do with the fund managers to understand, primarily to better understand the business activity of these companies as of today. No, it's not based on that. I've not finished my sentence. To understand the business activity of those companies today, to understand the active managers' investment decisions in these companies and what their future plans are. That's what we're asking for. Well, I would ask this as part of the conversation we'll have with engaging with them. And then by your virtues, there's delivering them an ultimatum that if they do not divest these holdings, we would look to exit the entire fund. Correct. Yes. That's what's being asked for. They disinvest from those companies or we will disinvest not tomorrow, not overnight. But, you know, we're building a new plan. They will not be a part of that. We would invest solely on political grounds and nothing to do with it. The U.S. Ethical grounds. It's part of the ethical investment strategy. It's my money and it's not in my name. I do not want my money occupied in the West Bank. It's illegal. Not in my name. How do you think that responds to the yes to my question? Not in my name. I do not want my money there. Clarity on whether the justification I'm giving is that this is a entirely more ethical rationale. Very important. Yes. Yes. Fine. Just to be clear in mind, that's what you're asking. In the same way as we disinvested from South Africa as a part of the state. Thank you, Peter. Because of the real life change. Does this mean that we go for the route of lobbying, which to me makes sense, rather than completely, isn't this enough? This isn't just a route that has been explained to us. They've been lobbied. They've been lobbied. OK. And they've ignored it. I mean, we're not the first people to challenge them. The lobby's still there. So they've ignored the lobbies. Surely we start the process where we lose a quarter or just slightly a quarter trillion pounds. Just to explain to council. Sorry, this is that. I think, of course, some of that perfectly. That's right. Absolutely. I'm not saying we just pull the money out, sit on cash, that's daft. I'm explaining to you what we need to say. That is the best to my son. Some of that, you know, to make sure that if they don't, we will do best. And we will do this in the case summations. Correct. Under the advice of our advisors in a timely manner. And the way from that fund to another fund, we will tell them that we will disinvest. We won't just suddenly take it going in circles. Councillor case summation is correct. We won't suddenly take the money out. It will be done in a timely manner. But we're telling them that this is what we are going to do. Peter, thank you. No, it's important that councils understand what we're voting on. Councillor Tate perfectly understood. She surmised perfectly well. Thank you, Peter. You said earlier Ron, and that's why I needed clarity, because the explanation was that if you want real life change, then you go through the lobbying process. Yes. Yeah. Well, that's not actually what we're proposing. Absolutely. It's not. We're giving them an ultimatum and it will be done. And the moneys we've moved in the way. Just a few seconds. Well, they've been lobbied and they've ignored it. So we pull the money out. We tell them do it or else. Right. We have to go to a vote share. Before I move to a vote share, I just wanted to bring the advisors in one final time. Can you add your hand up? So I just think it's crucial, so there's clearly you need more investment advice. You don't have to activate at the moment to make an enforcement investment from an investment perspective. You also need to take legal advice. So you have a fiduciary duty. Yes. You always need to ensure that any decision you take is evidenced that you have criteria for what, which companies you would divest from and which ones you wouldn't. You need very clear criteria and how that would evolve over time. And I would I was any of the committee members have not read the scheme advisory board statement on this, which is put on the website a couple of weeks ago. It's very helpful guidance, which you could see as kind of almost preliminary. It's not legal in nature. So you would have to take your own legal advice. But crucially, it says you are able to take into account on financial decisions in your investment strategy. To the extent it does not have a material financial impact on the fund and to the extent that it is supported by your membership. And it does caution. So, again, this is about how would you evidence this? It does caution if your membership is not fully aligned and that there's a difference of opinions within your membership. Then that could be difficult. So you would need to go through a number of steps here very carefully before you made any final decisions. So I would strongly caution you tonight. You could make you can actually vote on something, but you need to be very careful that you do not have all that. I do not believe you have all the facts available to make any final decision. The evidence is the information officers gave us on the request based on the United Nations list of prescribed companies operating in the illegal settlements on the West Bank. I think that is, you know, it's illegal for judiciary duty. We shouldn't be invested in things which are illegal. That's not a good investment. Investing somewhere that might blow up is not a very good return on your money. It's a bit risky. So I think we've covered that bit. The United Nations cells do it. Officers have identified these monies. That work has been done. I actually agree with you. I mean, we shouldn't just say, oh, we don't like this. We pull out. That work has been done. We asked us to do it. And they've identified these monies, which under the United Nations and British law are invested in legal operations. That work's been done. I totally agree with you. We've done that work. Yeah. I trust the UN on this. I think if they come up with this. We have a legal representative in online, do we not? Could we just just echo what Peter has just said? I couldn't put it more eloquently than him. What what what what the SAB, whatever they've got to say, when we've clearly got officers have done due diligence on this and they have come to this conclusion that they. That there is this this this money invested in what the UN has said is illegal territory. What are what what risks do we have with remaining where it is with that money remaining where it is? But it does. Thank you. I'm not concerned. There's no I don't believe that we don't have anything to do about legal. Andrew, did you want to come in? Yeah, I think just I think the advisers were right. There are many steps that one would need to take in this situation. I think for the purposes of tonight's deputation, as I understand it, is to note the deputation. I think the furthest we can go without a formal agenda item on this matter would be to to take this away. Obviously, everything that we've heard tonight will be considered by the committee and by officers. The advice will then be sought on what the options are available and they would have to be properly considered, because any such decision that is taken in light of of legal cases that have been taken in the past would probably require. Some kind of consultation of the full membership, which which is where things get complicated. So I understand the concerns that are raised tonight, but in terms of pure procedure, I think this is going to be it's not. So it's kind of a point, sorry. We didn't do that in South Africa. We didn't have a client who didn't over oil when it comes to Palestine, as I get thrown out. There's all these complicated processes. I didn't. The chair did not call on you. Yeah. And have you finished your point, please? Yeah. Yeah. Just I'm just saying that we do need to follow proper process. And actually, it is not a decision for this evening, but we can take the steer away. And I think decisions, formal decisions can be made quickly, but they need to be made methodically in the right way. Tonight is not an agenda item for a decision. That's that's that's the advice I'm giving this evening. I'm quite content with actually understanding the views of the twenty thousand strong membership, noting we don't actually have a current staff up on the committee even to represent the actual members of the committee. So I don't I'm surprised the trade union rep seems wanting to not hear the voices of the workers, but. Take that back. Take that back. That comment is deeply unfair. My union has done a lot of work nationally and in Lambeth. We've surveyed our members. We've been talking to people about it. So to claim that when I'm coming here and speaking, I'm doing it as an individual that is that is that I didn't say anything as a visual. I didn't say that you did push back on the fact that we didn't need to hear from the full membership. OK, OK. Council refused to withdraw his accusation. The largest trade union on the council. OK, we've done the work around this. So I think to try and speak in that way is deeply unfair. OK, I will. I will withdraw my comment, but I still do not understand why there is reluctance to wanting to hear the views of the full twenty thousand strong membership. I would all agree with us. We know that. And you know that. Many of them are our members. I'm happy to. We all know the view of our membership. I'm happy to commission that work to actually understand. No, I mean, we know we don't actually know. Peter, I'm moving on. So I'm on the basis of leadership, but I'm not going to take the vote on engagement. Who's reluctant now? The paper, the as I say, moving on the agenda item was to note the five and dictation that is noted. I'm setting aside this self-researched list of companies that is nowhere. Thank you. From a committee member, this. Yes. Thank you. A full committee member. Yes. I submit this as a member of this committee to ask for accountability and transparency in our investments. I think that is completely legitimate thing for a committee member to do. So if you said you're casting it aside again, I don't get why you like why you're saying that. What what the advice was legally is that is that it was that we can make a decision, we can make it rapidly, but we have to be methodical about it. So that, to my mind, means that the next pension committee meeting, we can have at least a lot of data on this. Maybe if we don't get every company and a series of companies and a series of options open for us about potential divestment strategies which don't affect the fiduciary nature. I will take your points on advisement as we as we pull together the next agenda meeting. Councillor Kaye. I think I was going to ask earlier, slightly related, that it's not on this list, but actually based on the information offices actually have. Whilst I understand this is your research, I want to see what offices actually present to us so that we can have that data. So that would be my request based off from the offices, but discounting this because I think that we do need to have what offices have at all, because obviously I don't know where this is going to be discounted. I'm asking I'm asking to know what investment we have in these companies. You can't say no to that. Surely offices will be able to. Do we have any money in Ghost Robotics? Do you have any money in Plasan, Raphael, NextVision? That's all I'm asking for. I've heard your point. I'm consulting offices. And it would be your decision for the committee if they as a whole want to request that information, obviously. I'll take a vote then. I will take a vote on this. Do committee want to have details of this list of companies that Simon has produced? Yes. Those in favour? I haven't been called on. Those against? What's that? Now you don't want the list. 50/50. Chair has the casting vote and that casting vote means we're not seeing that. Thank you. That is the end of the agenda item. If we don't then thank you very much. It's desirable we are. It's concluded we've noted the step industries committee. So that concludes the public cast of the meeting. Could I ask that the public and press now be included in the meeting. The use of the likelihood disclosure of exempt information. It's not your money. It's our money. It's being considered the public interest test. Can I confirm everyone still present at committee is content to do that? Please remember the change. Thank you and good night to all our viewers and those who attended the gallery attendees. Please exit the meeting and those joining virtually please exit the team meeting and join the separate exempt meeting invitations. Thank you. Thank you. [BLANK_AUDIO]