Decision details

21.1     The Committee considered a report on Environmental, Social and Governance (ESG) issues based on research by the Fund’s Investment Adviser, Hymans Robertson.

21.2     The Committee RESOLVED to:

1) include within  the Pension Fund Investment Beliefs,  the following statements relating to  ESG investment subject to refinement from Hymans Robertson:

·         Climate change presents a financial risk to the future investment returns from the Fund.

·          Close engagement with - and challenge to - the investment managers will improve understanding of these risks.

·          Individual stock selection decisions will be delegated to active managers but the Fund will retain the right to sell holdings in exceptional circumstances.

·         The Fund will aim to collaborate with other investors where this is expected to have a positive impact

·         The nature of the underlying benchmark is an important consideration, most notably for passive mandates.

2) agree that the East Sussex Pension Fund should sign up to the UK Stewardship Code; and

3) request an analysis of the Fund’s exposure to carbon risk within its equity holdings.

4) request that Hymans Robertson provide a report on whether there is a viable low carbon equity fund that could achieve the same or better rate of return compared to other passively managed equity funds.