“Is Councillor Campbell happy with the progress that has been made by the Dyfed Pension Fund to divest from fossil fuels in accordance with the Councils motion passed at the meeting on the 9th of October 2019 calling on the Fund to divest completely from fossil fuels within two years and to reinvest in local renewable energy projects?”
Minutes:
“Is Councillor Campbell happy with the progress that has been made by the Dyfed Pension Fund to divest from fossil fuels in accordance with the Council’s motion passed at the meeting on the 9th of October 2019 calling on the Fund to divest completely from fossil fuels within two years and to reinvest in local renewable energy projects?”
Response by Councillor Cefin Campbell, Executive Board Member for Communities and Rural Affairs:-
“Thank you Mr Reed for your question and, as you know the Council is the administering authority for the £3bn Dyfed Pension Fund and you will also probably know it involves over 60 organisation members and the decision made on investments has to have the approval of all the members not just Carmarthenshire County Council. So, the fund is a long-term investor responsible for looking after the interests of beneficiaries over many decades into the future. But climate risk and progressing to a low carbon environment is top of the Dyfed Pension Fund Committee’s agenda.
Whilst it is difficult to be specific on fossil fuel investments, about 2.9% of the Fund is currently invested in the energy sector. Now this has come down from about 4.5% in 2018 so the direction of travel is obviously moving in the right way
The Fund has, as I mentioned, made great strides forward on transferring investments into low carbon funds which started by investing £120m in the BlackRock UK Strategic Alternative Income Fund which includes investments in local renewable power.
The Dyfed Pension Fund Committee has recently approved an allocation of 10% (which works out to be £300m) of the Fund’s assets to a BlackRock “Reduced Fossil Fuels” passive global equity strategy and this will further reduce the total investments in fossil fuels and this will be recalculated at a later date.
And, finally, the establishment of the Wales Pension Partnership, which is an investment pool for all 8 Welsh Local Government Pension Scheme. In 2017 t provided the opportunity to the Dyfed Pension Fund to increase by 5% (about £150m) of its allocation to the Wales Pension Partnership Global Growth Fund which includes an investment in a Paris Agreement Aligned Fund.
So, as you can see, from what I’ve just mentioned the Dyfed Pension Fund Committee has a strategy in place to further increase in low carbon fund investments over the next 12 months which will continue the measured and responsible journey. So, although the fund has made great strides, there is, I acknowledge, some distance to travel again before we reach our goal. I hope that answers your question Mr Reed.
Mr Reed asked the following supplementary question:-
“Carmarthenshire County Council are one of the main contributors of the fund and what more can be done to move maybe to a different pension provider, bearing in mind that the Dyfed Pension Fund lost £63m last year because of the falling value of fossil fuel shares. So, what’s your view on that?
Councillor Campbell responded as follows:-
“Okay, so thank you for the supplementary. My view would obviously be an objective view in this instance. I don’t sit on the Dyfed Pension Fund Committee so, I have no direct influence on their investment strategy. But certainly, they have heard me talk many times about the need to disinvest. So, they are very much aware of that and as we all have investments, personal investments, they do fluctuate as we know and they can go up in value and then they can reduce in value. So that is the risk that we all take in making investments. But, I can certainly assure you Mr Reed that they in terms of the direction of travel are very much aware of the political pressure that I, and others, are putting on them to divest away from fossil fuels and, as I’ve mentioned, evidence has quite clearly shown that we’ve gone a long way to achieve that but I also acknowledge there’s quite a way to go yet and I will keep on putting pressure on the fund committee to divest even more.