Agenda and minutes
PDF 151 KBVenue: Ground Floor Meeting Room G02C - 160 Tooley Street, London SE1 2QH. View directions
Contact: Julie Timbrell
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Apologies
To receive any apologies for absence. Minutes: Councillor David Watson gave apologies for lateness. |
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Notification of any items of business which the chair deems urgent
In special circumstances, an item of business may be added to an agenda within five clear working days of the meeting. Minutes: There were none. |
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Disclosure of Interests and Dispensations
Members to declare any interests and dispensations in respect of any item of business to be considered at this meeting. Minutes: There were none. |
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Minutes
To approve as a correct record the Minutes of the meeting held on 11 October 2022. Supporting documents: Minutes: The minutes of the meeting held on 11 October 2022 were agreed as a correct record. |
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Pension Fund divestment progress
Officers have provided a report which they will present on Pension Fund divestment progress and strategy in light of the 2016 decision to divest and more recent commitment to ‘Make the council’s pension fund zero carbon by 2030’.
The following are enclosed:
· Summary of Carbon Footprint journey · Carbon reduction graph with notes · Investment strategy statement · Southwark Pension Fund Investment Strategy to Achieve Net Zero Carbon Exposure by 2030
Supporting documents: Minutes: Duncan Whitfield, Strategic Director Finance and Governance, presented on Southwark’s Pension Fund divestment progress and strategy in light 2016 decision to divest and more recent commitment to ‘Make the council’s pension fund zero carbon by 2030’.
He was joined by lead member , Councillor Stephanie Cryan Cabinet Member for Communities, Equalities & Finance, Tim Jones, Departmental Finance Manager, and Jack Emery , Divisional Accountant, Finance and Governance.
The chair took questions on the Pension Fund divestment progress and Carbon Tracker together, and these are recorded under the next item. |
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Confirmation of cooptees
The following cooptess are proposed to join the commission:
1. Lydia Marsden, Senior Research Officer within ShareAction's banking standards team.
2. Shalaka Laxman is an entrepreneur and sustainable finance professional with eight years of diverse experience within financial services including at Deutsche Bank developing sustainable financial products for large companies. Currently freelancing for the Cambridge Institute for Sustainability Leadership.
In addition Clinton van der Spuy has volunteered to contribute to the Climate Finance review , although he is unable to take up a co-optee role as he is based in New York. Clinton is a banker working at the intersection of capital markets, risk management and climate risk with a focus on addressing the risks and opportunities in the sustainable finance and climate risk space. Minutes: The chair proposed that the following co-optess join the commission:
· Lydia Marsden, Senior Research Officer within ShareAction's banking standards team.
· Shalaka Laxman is an entrepreneur and sustainable finance professional with eight years of diverse experience within financial services including at Deutsche Bank developing sustainable financial products for large companies. Currently freelancing for the Cambridge Institute for Sustainability Leadership.
In addition Clinton van der Spuy has volunteered to contribute to the Climate Finance review , although he is unable to take up a co-optee role as he is based in New York. Clinton is a banker working at the intersection of capital markets, risk management and climate risk with a focus on addressing the risks and opportunities in the sustainable finance and climate risk space.
RESOLVED
The commission agreed to co-opt Lydia Marsden and Shalaka Laxman.
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Carbon Tracker
Simon Perham - Head of Investor Outreach – Europe and Joel Benjamin Press & Communications Manager will present on Pension fund carbon divestment and energy transition . Supporting documents: Minutes: The chair welcomed the Simon Perham, Head of Investor Outreach, Europe, and Joel Benjamin Press & Communications Manager to present and take questions on Pension Fund carbon divestment and energy transition. Joel Benjamin gave a presentation, uploaded with the agenda. Below is an edited transcript of his talk: Carbon Tracker is an independent, non-profit financial Think Tank, with offices in London and New York. Carbon Tracker is funded by US, UK and EU foundations with an interest in all things climate. Our vision is to enable a secure global market, aligning capital markets with the reality of climate change. And our mission is mapping the transition from the fossil fuel industry to stay well below two degrees, Paris compliant trajectory. Carbon Tracker supports investors, such as pension funds, utilising the tactics of both engagement and divestment; a diversity of approaches is supported. The presentation will be mainly about the impacts of the energy transition on the financial sector and investments, and in how investors like pension funds should reposition themselves for that. It will explore pension fund objectives for investors who are on a divestment journey once the low hanging fruit has been exhausted, such as ending direct investment in fossil fuel companies, as covered in the previous presentation by Southwark Pension Fund. The priorities for any Pension Fund are to bring in stable, long term returns for members and keeping the contribution rate stable. A fossil fuel based economy is usually going up and down, which provides major complexity in managing share prices and return. It is very hard to manage a pension fund when your assets from returns are fluctuating on that basis. The objectives around stable returns are being delivered by council’s in the context of the climate emergency. So what can local authorities, and the people who manage pension funds, do to align our financial investments with the need to tackle climate change? Allied to decisions about pension fund divestment are the wider aims of council’s to address the Climate Emergency in their locality and the costs associated with this. One example is Cannock Chase District Council who set a district wide climate target, and then had to reconsider the near zero climate targets because of the gap between the costs it would take to actually decarbonize the entire borough and the available funds. Here this includes not just what the council is directly responsible for managing but also the wider district infrastructure, private housing etc. There is a far greater capital requirement to do those sort of things then the council has at its disposal, particularly after a decade of austerity. This speaks to the tension between where we need to get to in terms of decarbonizing our society and what resources we have at our disposal currently, and thinking about how to use those resources strategically. This an interesting dilemma for the pension fund, because as many of us will know there is often a lot of pressure from Central Government for Local Government to ... view the full minutes text for item 7. |
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Abundance
Karl Harder, co-founder of Abundance , will present on Community Municipal Bonds / Local Climate Bonds and more broadly on Climate Emergency transition.
A report ‘Financing For Society - Assessing the Suitability of Crowdfunding for the Public Sector’ has been provided as a briefing. Supporting documents: Minutes: Karl Harder, co-founder of Abundance, presented on Community Municipal Bonds / Local Climate Bonds and more broadly on Climate Emergency transition.
The chair invited questions on this under item 10, where they are recorded.
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Green Finance Institute
Matt Ferretti, Head of Partnerships, and Ryan Jude, Programme Director, Green Taxonomy will present. A report is enclosed. Supporting documents: Minutes: Matt Ferretti, Head of Partnerships, and Ryan Jude, Programme Director Green Taxonomy presented.
The chair invited questions on this under item 10, where they are recorded.
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3ci
Steve Turner, Director, 3Ci will present.
The following 3Ci reports are enclosed:
· Our Pathway Towards Net Zero Investment and Growth · Unlock Private Investment for Net Zero – A Practical Guide for Local Authorities
More can be found here: 3Ci.org.uk
Supporting documents: Minutes: Steve Turner, 3ci Director and Zoe Jennings, Head of Climate Investment presented.
The chair invited questions from the commission on the last three presentations combined: 3ci, Abundance, and the Green Finance Institute (GFI).
The following points were made:
· GFI referred to research by the Committee on Climate Change, who have estimated that reaching zero carbon by 2050 will cost the UK 1.4 trillion pounds, about a third of which is expected to come from the public sector. Therefore about two thirds of is expected from private capital. The presentation showscurrent finance that is available to Local Authorities on their capital spending. The Public Works Loans Board is the vast bulk of that. There is also some grant funding. The UK Infrastructure Bank, which has launched in the last year and a half has now added an extra 4 billion pounds that local authorities can borrow. However this is still is not enough money, furthermore the Public Works Loan Board is reaching capacity. Therefore projections for 2030 include a small proportion (5%) of funding from local climate bonds, which Abundance deliver.
· GFI explained that one of their roles is to look at barriers to investment. They bring together various coalitions, including policymakers, banks, and some of the pension funds. People in the relevant sector look at why is capital is not flowing even when the technology already exists. This includes examples such as barriers to uptake of green mortgages and why pension funds are not purchasing District Heating Networks in the UK like they do in the Nordics and Baltics, which would help with decarbonizing our heat sector.
· Members asked about potential miss matches between project and investor needs. 3ci said that while the projects they are supporting are still too early in the pipeline to answer that definitively, it is hoped that early engagement will enable a good match.
· Abundance advised that Municipal Bonds rest on local trust and so councils must be wary of any greenwashing. Residents will expect ethical delivery. There are some projects, such as solar, which can easily deliver steady returns, whereas rewilding or growing trees do not usually produce a profit, however they can be delivered through the donated part. Communication and transparency are key.
· Abundance noted that when individuals invest in a Municipal Bond they are not simply thinking about the financial return, they are also thinking about what their money is doing in the world. This interest has been increasing over the last decade, whereas back 50 years most people were completely unaware what their money in a bank, savings account, or pension fund was invested in. Now people are becoming increasingly aware and this growing desire to invest sustainably and ethically is almost on an exponential growth curve.
· Municipal Bonds not only raise money they also raise engagement. In delivering Net Zero councils have a direct role in decarbonizing their estate and influencing the wider infrastructure, but Local Authorities also have a role in mobilising the wider community to take action. ... view the full minutes text for item 10. |
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Work Programme
A cover report, work programme and review scopes are enclosed. Supporting documents: Minutes: The work programme was noted.
RESOLVED
Cllr Catherine Rose will be invited to the final meeting for her interview. |