This meeting was scheduled to receive reports on the Derbyshire Pension Fund's investments, stewardship, governance and approach to managing climate-related risks. The committee was scheduled to be asked to make decisions on a number of matters, including the adoption of an updated Governance Policy and Compliance Statement, approval of the Pension Fund's proposed UK Stewardship Code 2020 application, and approval of recommendations on the Fund's tactical asset allocation for the upcoming quarter.

Investment Report

The committee was scheduled to receive a report on the Fund's investments, including its performance and asset allocation. The report, written by Neil Smith, the council's Director of Finance, included a review of the Fund's asset allocation, investment activity since the last meeting, and long-term performance analysis. It also included recommendations on investment strategy and asset allocation from both Smith and the Fund's independent external adviser, Anthony Fletcher.

Fletcher's report, which was appended to Smith's, included:

an overview of market returns by asset class over the last quarter and 12 months.

an analysis of the Fund’s performance by asset class versus the Fund specific benchmark for the last quarter and the last 12 months.

an overview of the economic and market outlook by major region, including consideration of the potential impact on the Fund’s asset classes.

an overview of the outlook for each of the Funds asset classes for the next two years; and recommend asset class weightings for the next quarter together with supporting rationale.

Smith recommended that the committee note Fletcher's report, note the asset allocations, total assets and long-term performance analysis set out in the report, and approve the In-house Investment Management Team (IIMT) recommendations outlined in the report.

Stewardship Report

The committee was scheduled to receive a report on the stewardship activity undertaken by the Fund's external investment managers, Legal & General Investment Management (LGIM) and LGPS Central Limited (LGPSC).

The report stated that:

LGIM manages around £2.0bn of assets on behalf of the Fund through passive products covering: UK Equities; Japanese Equities; Emerging Market Equities; Global Sustainable Equities; and Sovereign Bonds.

LGPSC currently manages around £1.2bn of assets (£1.4bn on a committed basis) on behalf of the Fund through its Global Emerging Market Equities Sub-Fund, Global Investment Grade Bonds Sub-Fund, All World Climate Factor Equity Sub-Fund, Global Sustainable Equities Broad Strategy, Global Sustainable Equities Targeted Strategy, Primary Private Equity Fund, Private Debt Fund (two vintages), UK Indirect Residential Property Fund and Core/Core+ Infrastructure Fund. It is expected that LGPSC will manage a growing proportion of the Fund’s assets going forward as part of the LGPS pooling project.

The report was scheduled to be accompanied by a copy of both LGIM's Q3 2024 Quarterly Engagement Report and LGPSC's Q2 2024-25 Quarterly Stewardship Report.

Governance Policy and Compliance Statement

The committee was scheduled to be asked to approve a draft updated Governance Policy and Compliance Statement for the Fund. This document sets out the governance arrangements for the Fund and how it complies with statutory guidance issued by the Secretary of State on those matters.

Climate Risk Management Report

The committee was scheduled to receive a Climate Risk Management Report, prepared by LGPSC for the Fund.

The report sets out an analysis of the Fund’s approach towards climate-related risks and opportunities.

The LGPSC Climate Risk Management Report follows the structure recommended by the Task Force on Climate-Related Financial Disclosures (TCFD) around four key pillars: Governance; Strategy; Risk Management; and Metrics & Targets.

This is the fifth Climate Risk Management Report prepared by LGPSC, with the first, second, third and fourth reports being presented to the Pensions and Investments Committee in March 2020, November 2021, January 2023 and January 2024, respectively.

The report was scheduled to include an assessment of the Fund's climate strategy and climate-related metrics alongside the Fund’s long-term investment strategy, and an overview of the key highlights of the carbon risk metrics analysis.

The committee was scheduled to be told that:

The IIMT notes that these restatements can be significant and indicate that the climate metrics set out in the LGPSC Climate Risk Management Report should not be considered as definitive, and ongoing improvement in the consistency, comparability and quality of climate-related data is likely to have further impact (either positive or negative) in the future.

The report was also scheduled to include a number of recommendations that were to be considered by the Fund.