Agenda item

BCPP Responsible Investment Policy and Corporate Governance and Voting Guidelines

Beverley White reported that BCPP had asked all partner funds to consider the Partnership’s Responsible Investment Policy and Corporate Governance by the end of January 2019. Earlier versions of the documents had been presented to the Committee in December 2017, but the policies had been subject to a further review since then. Members were informed of key changes, and were invited to comment. John Hewitt noted that the Responsible Investment Policy was consistent with Durham’s Investment Strategy Statement.  

Resolved:

That the BCPP Responsible Investment Policy and Corporate Governance and Voting Guidelines be agreed.

BCPP National Conference 2018

The Committee was informed that Councillors J Atkinson and O Temple, John Taylor and Anne Delandre, and the Local Pension Board Chair Councillor A Hopgood had attended BCPP’s National Conference in Leeds on 8/9 November 2018.

Members were invited to provide feedback from the Conference. Councillor Temple highlighted the need for on-going financial modelling of Durham’s Pension Fund, to consider how income is recycled into the Fund in the long-term, and to look at the maturity of the Fund going forward. As a Fund tracking indices was preferred but the Committee had a responsibility for responsible investment in ESG and passive investment may not therefore be appropriate. In terms of global equities, two externally managed BCPP global equity funds were proposed and one internally managed option. It appeared that a mix of investment in private equity and infrastructure would provide greater flexibility.

Catrina Arbuckle of Mercer referred to Councillor Temple’s feedback and advised that passive investing did not mean that responsible investment was not possible, as long as a good passive Manager was used to manage investments.

Councillor Atkinson stated that the Responsible Investment Policy and Corporate Governance and Voting Guidelines addressed the matters that were considered at the Conference. There had been much discussion around voting procedures and also ethical investments which he considered would be a challenge.     

Councillor Hopgood advised that a meeting of Local Pension Board Chairs had been held during the Conference which was a useful information sharing exercise. As a result of that meeting it was proposed that Chairs would meet twice-yearly to share best practice. The meeting had also highlighted the need for the Local Pension Board to produce an Annual Report.

All Members considered that the Conference was very useful and for the new Members of the Committee, John Taylor and Anne Delandre, they felt it had improved their knowledge and understanding of the BCPP.