Agenda item

Having complied with the advance written notice requirement in Standing Order 18.1 and the subject requirement in Standing Order 18.2 of the Chichester District Council Constitution the attached motion will be proposed by Cllr Sharp and if duly seconded it will then be discussed at this meeting.

The Chairman invited Mrs Sharp to move her motion. Mrs Sharp moved her motion which was seconded by Miss Barrie.

 

Mrs Sharp then outlined her motion:

 

Chichester District Council declared a Climate Emergency in July 2019 and will need to place climate change at the heart of our forward plans in order to meet our target of becoming carbon neutral by 2050.

 

Chichester District Council employees are members of the West Sussex County Council Local Authority Pension Fund, which has funds invested in the fossil fuel industry.  Mark Carney is one of many leading advisers signalling that investments in fossil fuels are not safe in the long-term.  There is a growing movement across the UK for councils and organisations to divest from their fossil fuel investments, as a first step in their move towards carbon neutrality.

The following motion was passed by Worthing Borough Council and Adur District Council before Christmas and Arun District Council in January. I hope that this council will agree with, and support this request.

This Council calls upon the Trustees of the West Sussex County Council Local Authority Pension Fund (of which the Council’s employees are members) to divest that fund of all investments in fossil fuel stocks, equities and funds and it instructs the Council’s Chief Executive to write to the Trustees of the fund with a copy of this Motion and ask them to take action.

 

The Chairman invited Mr Wilding as Cabinet Member for Corporate Services to respond. Mr Wilding thanked Mrs Sharp for her motion. He explained that if the council were to approve the proposed motion, the Trustees of the Pension Fund would have no obligation to act on it.West Sussex County Council Local Authority Pension Fund has very substantial funds, which are managed by a Panel of Trustees on behalf of 80,000 members and over 200 employers.   CDC is just one employer and its element makes up some 4% of the fund.  The other two authorities you mentioned may have similar stakes in the Fund.The Trustees take Environmental, Social and Governance issues very seriously.

 

Mr Wilding then explained that the fund’s investment in fossil fuel companies has reduced from 4.1% of the total fund value in September 2016 to 2.4% of the total fund value in December 2019. This movement is due to the fund managers using their discretion about which stocks to retain, acquire or dispose of. The fund managers appointed by the Trustees consider: environmental, social, high standards of governance and financial benefit when making a decision to buy, sell or hold a stock.

 

Mr Wilding confirmed that the Fund had currently chosen to invest responsibly rather than divest or restrict the investment opportunities. As a result the managers invest considerable resources to support their long term stewardship and engagement with companies on the future direction and the risks associated with their business.  The benefit of this was illustrated recently when Royal Dutch Shell announced new carbon emissions targets that will directly link to executive pay following pressure from asset managers, including our own. The Local Government Pension Scheme is a defined benefit pension arrangement, whereby members pay a prescribed contribution dependent on their level of earnings. The balance of cost, and therefore the cost of fluctuations, is principally met by the employer. As a result the employer bears investment risk.

 

Mr Wilding then explained that the Trustees of the Pension Fund have a fiduciary duty to the members and beneficiaries of its Pension Fund.  In this context, investment decisions must be directed towards achieving a wide variety of suitable investments, and to what is best for the financial position of the fund (balancing risk and return in the normal way). Mr Wilding confirmed that the Trustees would have no obligation to act on the proposed motion.

 

Mrs Lintill then proposed amended wording to the motion to read as follows:

 

This Council calls upon the Trustees of the West Sussex County Council Local Authority Pension Fund (of which the Council’s employees are members) to consider divesting that fund of all investments in fossil fuel stocks, equities and funds and instructs the Council’s Chief Executive to write to the Trustees of the fund with a copy of this motion.

 

Mrs Taylor seconded the amendment.

 

Mr Hughes explained that the original motion was passed by Worthing and Adur District Council. He commented that concerns relating to the financial risk had been overstated.

 

Mr McAra commented that the Council cannot run the Pension Panel and should rely on the experts. He suggested members take no action.

 

Mr Oakley sought clarification on whether the Council would be asking the Trustees to do something contrary to their legislative duties. He commented that he did not want to destabilise such a sizeable fund which would affect employees of the council. He also commented on the level of investment of fossil fuel companies in the renewable energy market.

 

Mr Plowman commented that the motion could be widened to take a broader look at investments in ethical and environmental companies.

 

Mr Elliott commented on the number of homes Shell supplies with renewable energy.

 

Mr Hobbs commented that the symbolism of the motion would not be enough to affect the outcome.

 

Mrs Lintill then withdrew her counter motion.

 

Mr Brown then commented that not acting quickly enough would have a wider impact. He gave his support to the motion in order to put pressure on those who have the powers to make the change.

 

Mrs Johnson and Dr O’Kelly also gave their support to the motion.

 

Mr Dignum and Mr Sutton both opposed the motion.

 

Mr Plowman and Mr Dignum commented on rewriting the motion. Mrs Purnell proposed deferring the motion to so that Mr Plowman and Mr Dignum could come back to Council with alternative wording.

 

Mr Johnson commented that the motion indicates a clear direction of travel.

 

Mr Moss gave his support to the motion.

 

Mr Palmer opposed the motion and suggested instead that the activities and performance of the Panel ought to be reviewed on a regular basis.

 

Mrs Purnell sought clarification on whether the Pension Panel has rules on ethical investing. Mr Ward confirmed that the Panel’s Annual Report has a statement about making ethical investments.

 

Mrs Purnell then proposed that a decision on the motion be postponed in order to allow Mr Dignum and Mr Plowman time to reword. The proposal was not seconded at this stage.

 

Mrs Barrie then commented that encouragement needs to be given to ethical investing.

 

Mr Brown then proposed Mrs Lintill’s withdrawn proposal which was seconded by Mrs Sharp.

 

Rev Bowden gave support for Mr Brown’s proposal.

 

Mrs Purnell then put forward her proposal that a decision on the motion be postponed in order to allow Mr Dignum and Mr Plowman time to reword the request. Mr Dignum did not wish to support the proposal. Mrs Purnell then withdrew her proposal.

 

Mrs Sharp then formally withdrew her original motion.

 

Mr Plowman then put forward a proposal which he wished to be voted on if Mr Brown’s proposal was not carried. The proposal was for a cross party discussion with a group of members to look at the motion prior to its submission to WSCC. Mrs Purnell seconded the proposal.

 

Dr O’Kelly requested a recorded vote which was supported by four members. The vote was as follows:

 

Mrs Apel – Against

Mrs Bangert – Against

Mr Barrett – Absent

Miss Barrie – For

Mr Bell – Against

Rev Bowden – For

Mr Briscoe – Against

Mr Brown – For

Mr Dignum – Against

Mrs Duncton – Against

Mr Elliott – Against

Mr Evans – For

Mrs Fowler – Against

Mrs Graves – Against

Mrs Hamilton – Against

Mr Hobbs – Against

Mr Hughes – For

Mrs Johnson – For

Mr Johnson – For

Mrs Lintill – Against

Mrs Lishman – For

Mr McAra – Against

Mr Moss – For

Mr Oakley – Against

Dr O’Kelly – For

Mr Page – Against

Mr Palmer – Against

Mrs Plant – Absent

Mr Plowman – Against

Mr Potter – Against

Mrs Purnell – Against

Mr Rodgers – For

Mrs Sharp – For

Mr Sutton – Against

Mrs Taylor – Against

Mr Wilding - Against

 

The vote was not carried 22 against, 12 for and 2 absent.

 

Mr Plowman then put forward his proposal for a cross party discussion with a group of members to look at the motion to go to WSCC which was seconded by Mrs Purnell.

 

The vote was carried.

 

RESOLVED

 

That a group of members take part in a cross party discussion to look at the proposed motion prior to its submission to WSCC.

 

Members took a short break and Mr Dignum left the meeting.